Telkom South Africa Ltd., Africa’s largest fixed-line operator, is set to sell off troubled Multi-links. It has secured a deal that entails the sale of the CDMA network to Helios Towers Nigeria for $10 million.

Telkom SA took ownership of Multi-links in 2007, and has since spent 9.8 billion rand ($1.44 billion) on Multi- Links, which includes the $410 million cost of buying the business.

In 2010, Telkom declared it would stop funding the Nigerian-based CDMA, after it declared it had made no profit since acquiring the business. In three years, it had racked up R659m in losses.

It later reversed its decision; “I know there‘s been a lot of money spent on Multilinks but to shut it down now would be to buy high and sell low,” the former Acting Group Chief Executive, Telkom, Mr. Jeffery Hedberg said.

Multi-links had earlier been sued by Helios for a $252 million broken contract, after it stopped paying Helios for the leasing of mobile-phone towers in Nigeria three years into a 10-year contract. This led to a failed contract between Visafone and Multi-links; Visafone had attempted a $52 million purchase of the company, but failed after terms of the deal weren’t met. The sale to Visafone depended on conditions including renegotiation of a contract with Helios Towers Nigeria.

Telkom stated that operational funding to Multi-Links will be continued so as to facilitate completion of the transaction. As a matter of fact, a recent decision to stop funding to Multi-Links had been reversed by the preceding announcement.

Another stipulation stands in this deal which provides for sharing profits if and when Helio Towers resells Multi-Links within the next three years.

http://dailytimes.com.ng/article/south-african-firm-finalises-sale-multi-links