Telkom unloads Multi-Links
South African telecoms giant Telkom is selling its Multi-Links business to Nigeria’
Telkom issued a statement announcing that its board had mandated management to review options for the exit of the CDMA business of Multi-Links Telecommunications Limited.
It said Telkom and Visafone Communications Limited had entered into a legally binding agreement regarding the sale of the Multi-Links’ CDMA business to Visafone for an enterprise value of USD52 million.
The transaction is conditional on inter-alia regulatory approvals. Upon the successful closing of the transaction, Telkom will retain Multi-Links’ fibre network and fixed line operations in Nigeria.
When Telkom began buying up shared of Multi-Links in 2007, it said the move was in line with its strategy of expanding into African markets with major growth potential.
By the time it had acquired all shares in Multi-Links, Telkom had spent over USD400 million on the purchase. By late last year, Multi-Links was reported to have racked up over USD600 million in losses since 2007.
Visafone was born out of the strategic acquisition of three CDMA mobile network operators. It was incorporated in Nigeria in 2007 and offers mobile, fixed and any other telecommunications service to its subscribers. It now has over three million subscribers.
Jeffrey Hedberg, former Acting Group Chief Executive Officer of Telkom said: “ We are pleased to announce the successful conclusion of realigning our business model to focus on our core competencies. Telkom management is of the opinion that the sale of the Multi-Links’ CDMA business to Visafone represents the best option available to our shareholders and Multi-Links’ customers.”
Jim Ovia, Founder and Chairman of Visafone commented: “ Visafone recognises that this deal will solidify its position in the Nigerian marketplace and is committed to offering world-class voice and data solutions to existing Multi-Links customers.”