{"id":30716,"date":"2013-01-28T18:44:13","date_gmt":"2013-01-28T16:44:13","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=30716"},"modified":"2013-01-29T09:47:42","modified_gmt":"2013-01-29T07:47:42","slug":"altech-disposes-of-east-africa-ops","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/30716\/altech-disposes-of-east-africa-ops\/","title":{"rendered":"Altech disposes of East Africa ops"},"content":{"rendered":"

JSE-listed ICT group, Altech<\/a>, has disposed of its East African operations in a deal that would see Liquid Telecom<\/a> taking over the group’s relevant assets.<\/p>\n

As part of the deal, Altech will also purchase an additional ordinary shareholding in Liquid to the amount of US$16.5 million, and will remain a strategic minority shareholder in Liquid, holding an initial 8.6% of Liquid’s issued share capital.<\/p>\n

For so long as Altech holds all of the shares, it will be entitled to 10% of all votes capable of being cast at general meetings of ordinary shareholders of Liquid – and for so long as Altech holds not less than 5% of the total issued share capital of Liquid, Altech will be allowed to appoint one director on the group board.<\/p>\n

Altech will not be entitled to any Liquid dividend payouts for 18 months.<\/p>\n

Changing hands<\/h3>\n

Liquid was established in 1997 as an independent telecommunications provider for international, voice, internet and data traffic, and other related services based on satellite communication technology.<\/p>\n

It has since become a supplier of fibre, satellite, international carrier services and infrastructure to fixed and mobile telecommunications operators, internet service providers (ISPs) and enterprises in developing countries – particularly in central and southern Africa.<\/p>\n

“Altech believes that its [Altech East Africa] network would benefit considerably from becoming part of a larger, specialist network and ISP operator with more extensive experience in building, maintaining and operating networks in Africa,” Altech said in a SENS announcement.<\/p>\n

“The combination of Liquid\u00b4s southern and central African network facilities with those of AEA in East Africa will create a formidable pan-African entity which will be able to offer unparalleled communications, access and support services to major international corporate clients, in particular.”<\/p>\n

According to Altech, the combination of Liquid’s and Altech East Africa’s network will create the African continent’s largest single terrestrial fibre network connecting more African countries than any other single terrestrial network.<\/p>\n

The transaction is still subject to approval by the Altech board, the board of Altech’s listed holding company Allied Electronics Corporation Limited (Altron<\/a>), the board of Liquid; and approval by any applicable regulatory bodies.<\/p>\n

\"Craig<\/a>

Altech CEO, Craig Venter<\/p><\/div>\n

East Africa problems<\/h3>\n

In 2012, Altech suffered due to its operations in East and West Africa – though saw a marked improvement in group operations after signing a deal to offload the latter (West Africa).<\/p>\n

In September 2012, Altech reported\u00a0a R420 million loss in results from operating activities for the six month period ending August 2012, from a R283 million profit in 2011.<\/p>\n

Revenue increased by 6.8% to R5.2 billion, and its operating profit before capital items was 13.5% lower than that of the prior period, mainly due to losses incurred in Altech\u2019s operations in East and West Africa.<\/p>\n

At the time of the report, Altech CEO, Craig Venter<\/a> said that the impairments incurred by Altech over the interim period solely related to East and West Africa.<\/p>\n

“Altech East Africa was substantially profitable for the two year period following the acquisitions of KDN, Infocom and ASG,” Altech said on Monday (28 January 2013).<\/p>\n

“Overall, however, it has been significantly loss-making recently, due to a number of adverse factors.”<\/p>\n

“These include the simultaneous connection of several new undersea cables to East Africa, leading to substantial over-capacity in wholesale bandwidth and resulting in price decreases of over 80%.”<\/p>\n

According to Altech’s statement, the post-transaction headline earnings per share and basic loss per share for the group have been adjusted for the de-recognition of the East Africa losses from the group; a once-off transaction costs of R5 million; and an estimated finance expense of R40 million.<\/p>\n

“The ‘After the transaction’ basic loss per share has been adjusted for the recognition of a loss on disposal of R666 million attributable to Altech shareholders,” Altech said.<\/p>\n

More on Altech
\n<\/strong><\/h3>\n

Altech shares slump amid interim loss<\/strong><\/a><\/p>\n

Altech offloads West Africa operation<\/strong><\/a><\/p>\n

Altech, Altron caned by East and West Africa<\/strong><\/a><\/p>\n

Altech West Africa talks still ongoing<\/strong><\/a><\/p>\n

Altech expects West Africa disposal in 6-8 weeks<\/strong><\/a><\/p>\n

Altech posts R240m pre-tax loss on African units<\/strong><\/a><\/p>\n

East and West Africa operations hurt Altech<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

JSE-listed ICT group, Altech, has sold off its East African operations to Liquid Telecoms.<\/p>\n","protected":false},"author":10,"featured_media":15838,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[311,5086,26,5085],"class_list":["post-30716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-altech","tag-east-africa","tag-headline","tag-liquid-telecom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=30716"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30716\/revisions"}],"predecessor-version":[{"id":30719,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30716\/revisions\/30719"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/15838"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=30716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=30716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=30716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}