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Johannesburg Stock Exchange-listed group to offload Liquid Telecom 8,6pc stake to Econet

Business Reporter
JOHANNESBURG Stock Exchange listed technology group Altech has announced that it will offload its 8,6 percent stake of Liquid Telecom to Econet Wireless Global Limited.
Liquid is an Econet-owned 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.

It 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.
The share value of the stake is US$55 million which will be sold to Econet on February 28 this year.

This development follows an agreement which was concluded between Liquid and Altech with effect from February 28, 2013.
“Effective  February, 28 2013 Altech concluded an agreement with Liquid, in terms of which Altech acquired 8,6 percent of Liquid’s issued share capital in exchange for Altech’s interests in its East African network assets and the cash subscription of US$16,5 million. At that time, the 8,6 percent equity stake was valued at US$50 million.

“Altron shareholders are advised that Altech, an indirectly wholly owned subsidiary of Altron, has exercised its put option and has entered into an agreement with, inter alia, Econet to dispose of its 8,6 percent equity interest in Liquid for a cash consideration of US$55 million. The disposal is subject to approval by the Altron board by January 21, 2014.

“Notwithstanding the Disposal by Altech of its 8, 6 percent equity interest in Liquid and the subsequent termination of the Liquid shareholders’ agreement between, inter alia, Altech and Econet, those provisions of the shareholders and other agreements which were intended to survive the   termination of the Liquid shareholders’ agreement will remain in full force and effect,” reads part of the statement.

Altech said the rationale for disposing the stake was that following the delisting of Altech and the creation of the Altron Telecommunications, Multi- media and Information Technology division (Altron tmt), both the Altron and Altech boards no longer considered Altech’s 8,6 percent equity interest in Liquid to be core to the ongoing operations of the Altron group.

The company also said the cash consideration from the disposal will be used to   reduce the Altron group’s net debt position following the scheme of arrangement between Altron and Altech, completed on August, 19 last year.

Altech added that despite the disposal, the Altron group will continue to explore areas of common commercial interest and co-operation with the Econet Liquid group in Africa.

“This consideration will give rise to a profit on disposal of US$12,5 million before tax which will be treated as a capital item and will fall outside of headline earnings,” said Altech.