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Johannesburg - Multi-Links - a wholly owned subsidiary of Telkom [JSE:TKG] - will be sued for damages, Blue Label Telecoms [JSE:BLU] said on Friday in a statement.
Blue Label has an effective ownership of 36.72% in Africa Prepaid Services Nigeria (APSN) through its 72% shareholding in Africa Prepaid Services.
"In terms of the Super Dealer Agreement with Multi-Links, APSN was given the right to procure customers for, and to sell and market, the complete range of Multi-Links' CDMA services and products, on an exclusive basis in Nigeria, for a 10 year period which commenced in December 2008,” Blue Label Telecoms added.
Multi-Links, however, recently announced that it intended to exit its voice CDMA service and products business.
On November 25 2010 Multi-Links notified APSN that it had terminated the agreement.
“Multi-Links' purported termination of the agreement is unlawful and
constitutes a repudiation of its obligations in terms of the agreement, which wrongful repudiation has been accepted by APSN and APSN has cancelled the agreement.”
APSN intended to institute proceedings for the recovery of the damages it had suffered and would continue to suffer arising out of Multi-Links' “wrongful repudiation” of the deal and its consequent cancellation.
For the financial year ended May 2010, APSN contributed R38.7m to the
group's net profit after tax, equating to 5.1c of the group's headline earnings per share of 48.27c per share.
APS had other operations outside of the agreement and the termination of the agreement would not result in APSN withdrawing from Nigeria, the statement added.
“APSN has confidence in the growth opportunities which Nigeria presents for the consumption of prepaid products, including airtime, electricity and other products and services such as bill payments and, in time, money transfer.”
The company intended to expand its existing transactional footprint to
facilitate growth in the virtual distribution of these products in partnership with Nigerian network operators and utility providers.
Blue Label has an effective ownership of 36.72% in Africa Prepaid Services Nigeria (APSN) through its 72% shareholding in Africa Prepaid Services.
"In terms of the Super Dealer Agreement with Multi-Links, APSN was given the right to procure customers for, and to sell and market, the complete range of Multi-Links' CDMA services and products, on an exclusive basis in Nigeria, for a 10 year period which commenced in December 2008,” Blue Label Telecoms added.
Multi-Links, however, recently announced that it intended to exit its voice CDMA service and products business.
On November 25 2010 Multi-Links notified APSN that it had terminated the agreement.
“Multi-Links' purported termination of the agreement is unlawful and
constitutes a repudiation of its obligations in terms of the agreement, which wrongful repudiation has been accepted by APSN and APSN has cancelled the agreement.”
APSN intended to institute proceedings for the recovery of the damages it had suffered and would continue to suffer arising out of Multi-Links' “wrongful repudiation” of the deal and its consequent cancellation.
For the financial year ended May 2010, APSN contributed R38.7m to the
group's net profit after tax, equating to 5.1c of the group's headline earnings per share of 48.27c per share.
APS had other operations outside of the agreement and the termination of the agreement would not result in APSN withdrawing from Nigeria, the statement added.
“APSN has confidence in the growth opportunities which Nigeria presents for the consumption of prepaid products, including airtime, electricity and other products and services such as bill payments and, in time, money transfer.”
The company intended to expand its existing transactional footprint to
facilitate growth in the virtual distribution of these products in partnership with Nigerian network operators and utility providers.
