Altech expects West Africa disposal in 6-8 weeks

Altech CEO, Craig Venter said on Wednesday (25 April 2012) that the group is six to eight weeks away from disposing of its ailing West Africa operation.

Altech reported a marginal rise in revenue to R9.97 billion, from R9.65 billion before, and operating profit from capital items of R649 million, from R787 million.

Adjusted headline earnings declined to 388 cents, from 529 cents in 2011.

Venter attributed the decline in earnings to the groups’s under-performing East and West Africa operations.

Venter said that West Africa had achieved eight years of profit but was at a mature stage.

“Negotiations are in place and are at an advanced stage for a disposal of a 70% interest in our West African business.”

He noted that two companies had expressed interest in the group and was confident that a deal would be concluded within eight weeks, “to alleviate further losses”.

Venter told BusinessTech that Altech was targeting net asset value (NAV) plus a premium for West Africa, and hoped to achieve 20% of NAV.

The company boss said that, should discussions to sell the business fall through, it would undergo a controlled auction process. “It will not sit around Altech group for 12 months,” Venter said.

Operations in East Africa were hampered by currency fluctuations; high inflation rates and interest costs; sharp drops in broadband pricing; and network instability due to fibre and undersea cable breaks.

“We are busy restructuring our East African operations into a more regional-focused business entity. We remain positive that the remedial measures that we have put in place in East Africa will have a positive effect in the future,” Venter said.

Venter continued, saying that Altech would appoint a chief operating officer, “a key appointment within the next six to twelve months”. He added that the new appointment would likely be an internal employee.

“The upside is that we have cleaned the slate, we are disposing of our West African business,” Venter concluded.

Looking ahead, chief technology officer and chief strategy officer, Willie Oosthuysen said that Altech would target telematics through Altech Netstar in order to grow its geographical foot print. Cloud computing would also be a target area, through its subsidiary, Altech Autopage, he said.

By 13h45, Altech’s shares were trading higher, up 0,29%, or 15 cents, to R52.40.

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Altech expects West Africa disposal in 6-8 weeks