Johannesburg Stock Exchange (JSE)-listed technology group Altech is poised to offload its troubled East African businesses to Mauritius-based Liquid Telecom, which claims to preside over the ‘largest fibre network in southern Africa’. TechCentral reports that the ‘complex’ deal will see Altech take an 8.6% stake in Liquid, which is majority owned by the Econet Wireless Group, the company founded by Zimbabwean telecoms tycoon Strive Masiyiwa. For its part, Altech intends to hold the stake as a ‘strategic minority interest shareholding’, and will be entitled to 10% of all votes being cast at general meetings of ordinary shareholders of Liquid Telecom. Further, Altech will also be entitled to appoint one director to Liquid’s board, but will not be entitled to receive dividends for 18 months after the conclusion of the deal.
Craig Venter, CEO of Altech Group, commented: ‘As shareholders are aware, our East African activities have, in recent years been problematic and unprofitable, and we have previously expressed our intention to deal effectively with these challenges. The Liquid transaction opens up a positive new chapter for Altech, in partnership with a group with proven expertise in its sector. During the past two years we have sustained substantial losses and impairments on our East African assets. However, as a consequence of this transaction these losses will now discontinue and we can anticipate attractive returns on our investment in Liquid. Altech has already announced an agreement for the disposal of its loss-making Altech West Africa operation and the combination of these two transactions should put Altech firmly back in its more normal growth patterns of the past’.
Liquid, which was established in 1997, provides backhaul between most urban areas and last mile connectivity in the main cities of the Democratic Republic of Congo (DRC), Zambia, Zimbabwe, Botswana, Lesotho and South Africa. Further, the company claims that its network is the first to cross country borders and covers some of the most challenging parts of the world where no fixed network has existed before; many of these areas are not covered by wireless or satellite either.