JSE-listed Vodacom has sold part of its Gateway unit for $26.4 million - or R220 million - to PCCW Global.
Vodacom says in a statement to shareholders that it is selling certain investments, supplier agreements and assets of Gateway Carrier Services. Vodacom has sold the non-core carrier unit, but is holding onto the enterprise segment, which is being rolled into Vodacom Business.
The deal covers Gateway Communications, Gateway Communications Belgium, Gateway Communications UK, Gateway Communications Mozambique and Gateway Communications France, as well as the supplier agreements and assets of Gateway Communications Africa (UK).
Gateway forms part of Vodacom Business Africa Group. Vodacom bought Gateway's carrier services and business network solutions divisions in 2008, for $700 million, or around R5.8 billion at the current exchange rate.
PCCW Global, a subsidiary of Hong Kong telecommunications provider PCCW Limited, covers more than 1 800 cities and 120 countries. It is a significant stakeholder in the Intra-Asia Cable System, the region's first direct, point-to-point express optical fibre submarine cable interconnecting Hong Kong, Tokyo and Singapore, it says on its Web site.
A year ago, Gateway was worth $72 million, after Vodacom wrote it down substantially. Gateway has customers in 40 countries in Africa, providing communications services to multinational companies and telecommunications network operators.
During the group's results presentation in May, Vodacom CEO Pieter Uys explained it does not make sense to be in the carrier business unless the company has economies of scale. Gateway returned an operating loss for the full year.
The agreement will become effective after certain closing conditions, set out in the agreement, are fulfilled.
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