Telkom South Africa has announced it has signed an agreement to sell its struggling Nigerian unit Multilinks to an affiliate of Helios Towers Nigeria (HTN). Under the terms of the deal, the unnamed unit of local tower building company HTN will acquire full ownership and control of Multilinks for a consideration of around USD10 million. The amount is a fraction of what Telkom originally paid; the telco bought its initial 75% stake in Multilinks for USD280 million in May 2007 and purchased the remaining 25% in January 2009 for USD130 million. Earlier this month Telkom said it was cutting off all funding to Multilinks after an attempt to sell its mobile unit was blocked by HTN, which said it had an injunction preventing the sale of the Nigerian operator. Telkom will now continue to provide operational funding to Multilinks to enable the completion of the sale to HTN. The South African telco added that it would receive a portion of any upside above a certain threshold in the event that HTN sells Multilinks or it assets within three years of the completion of the deal. The transaction is subject to approval from the relevant antitrust bodies.
As previously reported by CommsUpdate, Telkom announced earlier this month that a deal agreed in April 2011 to sell the loss-making division’s mobile business to local rival Visafone Communications for USD52 million had fallen through, after HTN said it held an injunction barring the sale of Multilinks until a legal dispute was settled. HTN, which is backed by private equity group Helios Investment Partners and South Africa’s Shanduka Group, said it was suing Telkom for at least USD251 million, after the South African firm walked away from a ten-year rental agreement in Nigeria after just three years.