By Emmanuel Elebeke

Telkom South Africa says it has signed an agreement to sell its Nigerian unit Multilinks to an affiliate of Helios Towers Nigeria (HTN).

Under the terms of the deal, Helios Towers Nigeria will acquire full ownership and control of the Multilinks unit for a consideration of around USD10 million.

The amount is a fraction of what Telkom originally paid. The telco bought its initial 75% stake in MultiLinks for USD280 million in May 2007 and purchased the remaining 25% in January 2009 for USD130 million.

It will be recalled that earlier this month, Telkom said it was cutting off all funding to Multilinks after an attempt to sell its mobile unit was blocked by HTN, which said it had an injunction preventing the sale of the firm.

Telkom said it will continue to provide operational funding to MultiLinks to enable the completion of the sale to HTN.

The South African telco added that it would receive a portion of any upside above a certain threshold in the event that HTN sells MultiLinks or its assets within three years of the deal, saying that the transaction is subject to approval from the relevant antitrust bodies.

Telkom had announced earlier in June that there was a deal in April to sell MultiLinks to local rival, Visafone for USD52 million. HTN, which is backed by private equity group Helios Investment Partners and South Africa’s Shanduka Group, said it was suing Telkom for at least USD251 million, after the South African firm walked away from a ten-year rental agreement in Nigeria after just three years.