Telkom sells part of Multilinks to Visafone for US$ 452 million
Telkom South Africa has announced that it has entered into a binding agreement to sell part of its struggling Nigerian CDMA unit Multilinks to Visafone Communications for an enterprise value of USD52 million. Upon the successful closing of the transaction, Visafone will acquire the operator’s mobile unit, while South Africa-based Telkom will retain Multilinks’ fibre network and fixed line operations. ‘We are pleased to announce the successful conclusion of realigning our business model to focus on our core competencies,’ commented Jeffrey Hedberg, former acting group CEO of Telkom, adding: ‘Telkom management is of the opinion that the sale of the Multilinks’ CDMA business to Visafone represents the best option available to our shareholders and Multilinks’ customers.’ Meanwhile, Jim Ovia, founder and chairman of Visafone, said that the deal will solidify its position in the Nigerian market. The transaction is subject to approval from the relevant antitrust bodies.
TeleGeography’s GlobalComms Database states that Telkom acquired a 75% stake in Multilinks on 1 May 2007 for USD280 million, and purchased the 25% it did not already own from Kenston Investments in January 2009 for USD130 million. However, Telkom failed to turn around the fortunes of the ailing company, which has struggled to compete in Nigeria’s fiercely competitive market, and wrote down the value of Multilinks by ZAR5.2 billion (USD751 million) in the financial year ended 31 March 2010. At the end of 2010 Multilinks had a total of 1.45 million CDMA mobile customers, according to data from the Nigeria Communications Commission (NCC), as well as 121,834 million fixed-wireless subscribers.