Cellcom Demands $230 Million in Damages Following Talks Break-Down
Published on: 14th Jun 2016
Note -- this news article is more than a year old.
Israel's Cellcom is seeking USD230 million in damages after a partnership with rival Golan Telecom broke down.
Cellcom was attempting a takeover bid for Golan Telecom, but in light of regulatory opposition was working on a network sharing agreement instead.
Last week, another rival, Hot Mobile announced a 10-year network sharing deal with Golan Telecom, freezing out Cellcom.
Cellcom has now responded, demanding USD230 million in damages compensation.
"The company has notified Golan Telecom and its shareholders that the Hot agreement constitutes material breaches of the Share Purchase Agreement (SPA) and National Roaming Agreement (NRA) between the company and Golan Telecom, including a service exclusivity obligation and obligations not to materially change the business to be purchased," Cellcom said.
The sum being demanded amounts to around two-thirds of the price that Cellcom was offering to pay in order to buy Golan Telecom -- being USD312 million.
Cellcom also warned that a substantial reduction of the expected future revenues from Golan Telecom will have a material adverse effect on the its revenues and results of operations.