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Israeli telco says smaller rival has failed to pay the ILS600 million it claims is owed to it.
Cellcom Israel on Wednesday filed a liquidation request against smaller rival Golan Telecom, after the latter failed to comply with Cellcom’s demand that it pay 600 million shekels (€147.8 million) in compensation.
Cellcom had hoped to acquire Golan, but, after coming up against regulatory opposition to the deal, was working on a national roaming agreement (NRA) with the telco instead. However, in June, another operator, Hot Mobile, swept in, striking a 10-year network deal with Golan.
Cellcom claimed that the Hot Mobile deal constituted a material breach of its share purchase agreement (SPA) with Golan, and demanded Golan pay compensation totalling ILS600 million by 3 December. Cellcom claimed that Golan also owed it a further ILS300 million worth of payments under their aborted NRA.
Cellcom also successfully petitioned the courts to block Golan’s deal with Hot Mobile, prompting Golan to search for a new buyer instead.
Rumours emerged in September that Israeli conglomerate Elco Holdings, former Pelephone CEO Gil Sharon, and 018 Xfone owner Hezi Bezalel were interested in taking over Golan, which was keen to strike a deal before Cellcom’s December deadline.
However, an agreement has yet to emerge, prompting Cellcom to pursue a liquidation request against Golan.
"The company cannot estimate what the decision in such requests will be, or their impact on the company’s ability to collect amounts owed by Golan or to generate future revenues from Golan," said Cellcom, in a statement on Tuesday.
