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Johannesburg - A Nigerian court handed a setback to South Africa's Telkom [JSE:TKG] on Tuesday, ruling disputed lease agreements between its Nigerian unit and a local company were valid.
The decision by the Lagos High Court could delay the effort by Telkom, South Africa's largest fixed-line operator, to sell its struggling Nigerian business, Multi-Links.
Telkom said the court had ruled that lease agreements between Multi-Links and local firm Helios Towers Nigeria were valid.
Helios, which is backed by private equity group Helios Investment Partners and South Africa's Shanduka Group, is suing Telkom for at least $251m, claiming the South African firm walked away from a ten-year rental agreement after just three years.
Telkom had argued that the contracts were not valid, court documents have shown.
"The Lagos High Court in Nigeria found in favour of Helios Towers Nigeria in the matter regarding the validity of ... site lease agreements between Multi-Links and Helios," Telkom said.
It also said that Helios' damages claim for more than $250m had not yet been set down for a hearing.
Telkom plans to sell Multi-Links for $52m to Visafone Communications, to focus on improving its business in South Africa, where it has been hurt by fierce competition.
Telkom said it would need to resolve the dispute before it could complete the transaction.
The decision by the Lagos High Court could delay the effort by Telkom, South Africa's largest fixed-line operator, to sell its struggling Nigerian business, Multi-Links.
Telkom said the court had ruled that lease agreements between Multi-Links and local firm Helios Towers Nigeria were valid.
Helios, which is backed by private equity group Helios Investment Partners and South Africa's Shanduka Group, is suing Telkom for at least $251m, claiming the South African firm walked away from a ten-year rental agreement after just three years.
Telkom had argued that the contracts were not valid, court documents have shown.
"The Lagos High Court in Nigeria found in favour of Helios Towers Nigeria in the matter regarding the validity of ... site lease agreements between Multi-Links and Helios," Telkom said.
It also said that Helios' damages claim for more than $250m had not yet been set down for a hearing.
Telkom plans to sell Multi-Links for $52m to Visafone Communications, to focus on improving its business in South Africa, where it has been hurt by fierce competition.
Telkom said it would need to resolve the dispute before it could complete the transaction.
