(Updates with comment from Telkom in fifth paragraph.)
June 28 (Bloomberg) -- Telkom South Africa Ltd., Africa’s largest fixed-line phone company, signed a preliminary agreement to sell its Nigerian unit to an affiliate of Helios Towers Nigeria, following a legal battle between the companies.
Telkom will sell Multi-Links for $10 million, it said today in a stock-exchange filing. The Pretoria, South Africa-based company said it will continue to provide interim operational funding to Multi-Links until the transaction’s expected completion in August.
The South African company said on June 13 that it had ceased all funding to Multi-Links, which has been sued for $252 million by Helios Towers Nigeria, a unit of London-based Helios Investment Partners LLP, for a breach of a lease contract. Multi-Links contested the validity of a 10-year contract to lease phone towers built for it by Helios. It had walked away from the deal in its third year. A judge at the High Court in Lagos ruled on June 7 that the contract was valid.
A deal to sell the CDMA-technology unit of Multi-Links to Visafone Communications Ltd. for $52 million in April fell through after Multi-Links failed to resolve the $252 million Helios claim.
Helios Towers Nigeria “will acquire full ownership and control” of Multi-Links when the deal is completed, Telkom said in an e-mailed statement. The price may increase depending on achievements of certain conditions, it said, without giving details.
-- Editors: Jim Silver, Niamh Ring, Emily Bowers.
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