Huge Group in R10 million MTN legal settlement

·11 Sep 2014

Huge Group says that it has paid MTN a settlement amount of R10 million with all legal action instituted by the mobile operator thereby withdrawn.

MTN filed against Huge Group in 2011 demanding R30 million, plus interest, following its acquisition of iTalk Cellular, to which Huge had objected for competition reasons.

In August, Huge said in a SENS announcement that it would pay MTN R10 million before September 15.

The Alt-X listed holding company said on Tuesday that it raised R20 million in a rights offer.

The rights offer closed on Friday, 5 September 2014, and was oversubscribed by 43%, Huge said.

Huge said that part of the proceeds would be used to “satisfy the settlement agreement reached with a major supplier of the group”, with the remainder used “to finance the rapid growth which the company is experiencing currently”, BusinessDay reported.

In a brief business update on Thursday, Huge Telecom said “it continues to enjoy high levels of sales activity, achieving another record month in August, and has now sold 6 800 new telephone lines since the commencement of the current financial year”.

“With the settlement of the dispute above, which had been the main remaining area of uncertainty, and management´s continued focus on the new business model, the board´s view is that a solid foundation has been laid in order to grow the business,” the group said.

In May, Huge reported a 23% decline in revenue for the year ended February 2014, from R266 million, to R203.5 million; however, headline earnings per share advanced to 13.92 cents per share, from a loss of 4.07 cents in 2013.

The group reported an operating profit of R18 million, from a prior loss of R1.2 million before.