Allied Technologies (Altech) says it will dispose of its 8.6% equity stake in Liquid Telecommunications, less than a year after it acquired a stake in the business.
Altech, which delisted from the JSE in August after it was absorbed by its parent company, Allied Electronics (Altron), acquired 8.6% of Liquid’s issued share capital in exchange for its interests in its East African network assets and the cash subscription of US$16.5 million, in February 2013.
At that time, the 8.6% equity stake was valued at US$50 million (R454 million at an exchange rate of R9.07 to the US$).
The group announced on Friday (10 January) Altech, that it has has entered into an agreement with Econet Wireless Global Limited to dispose of its equity interest in Liquid for a cash consideration of US$55 million (R588 million at an exchange rate of R10.69 to the US$) .
The Disposal is subject to approval by the Altron board.
Liquid is an independent telecommunications provider for international, voice, internet and data traffic, supplying fibre, satellite and international carrier services to fixed and mobile telecommunications operators, internet service providers and enterprises in developing countries.
Liquid operates and owns one of Africa´s most extensive fibre optic networks spanning over 13,000 kilometres, which provides services to customers in Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, Democratic Republic of Congo, Lesotho and South Africa.
Altech said that following its delisting, and the creation of the Altron Telecommunications, Multi-media and Information Technology division, both the Altron and Altech boards no longer consider Liquid to be core to the ongoing operations of the group.
Altech said that the cash consideration from the disposal will be used to reduce the Altron group’s net debt position.
“Notwithstanding the disposal, the Altron group will continue to explore areas of common
commercial interest and co-operation with the Econet/Liquid group in Africa,” it said.
The Disposal is subject to approval by the Altron board by 21 January 2014.