| Fri 26 Nov 2010, 16:21 | | BLU - Blue Label Telecoms Limited - Notice of cancellation of agreement |
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BLU
BLU
BLU - Blue Label Telecoms Limited - Notice of cancellation of agreement
Blue Label Telecoms Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/06)
Share code: BLU ISIN: ZAE000109088
("Blue Label" or "the company")
NOTICE OF CANCELLATION OF AGREEMENT
Blue Label has an effective ownership of 36.72% in Africa Prepaid Services
Nigeria Limited ("APSN") through its 72% shareholding in Africa Prepaid
Services (Pty) Ltd. In terms of the Super Dealer Agreement ("the Agreement")
with Multi-Links Telecommunications Limited ("Multi-Links") (a wholly owned
subsidiary of Telkom SA Limited), 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.
Multi-Links has recently announced that it intends to "exit" its voice CDMA
service and products business. On 25 November 2010 Multi-Links notified APSN
that it has 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 intends to institute proceedings for the recovery of the damages it has
suffered and will continue to suffer arising out of Multi-Links` wrongful
repudiation of the Agreement and its consequent cancellation.
For the financial year ended May 2010, APSN contributed R38.7 million to the
group`s net profit after tax, equating to 5.1cents of the group`s headline
earnings per share of 48.27cents per share.
APS has other operations outside of the Agreement. The termination of the
Agreement will not result in APSN withdrawing from Nigeria. 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. To
this end APSN intends 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.
26 November 2010
Sponsor:
Investec Bank Limited
Date: 26/11/2010 16:21:02 Produced by the JSE SENS Department.
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