Altron disposal by Altech of interest in Liquid | |
10 January 2014 16:41 | |
Effective 28 February 2013 Altech concluded an agreement with Liquid, in terms of which Altech acquired 8.6% of Liquid's issued share capital in exchange for Altech's interests in its East African network assets and the cash subscription of USD16.5 million. At that time, the 8.6% equity stake was valued at USD50 million (R454 million at an exchange rate of R9.07 to the USD). 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 Wireless Global Ltd. ("Econet") to dispose of its 8.6% equity interest in Liquid for a cash consideration of USD55 million (the "disposal"). The disposal is subject to approval by the Altron board. Notwithstanding the disposal by Altech of its 8.6% 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. Nature of business 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. Rationale for the disposal
Consideration The disposal consideration is a cash consideration of USD55 million (R588 million at an exchange rate of R10.69 to the USD) payable by Econet to Altech on 28 February 2014, subject to Altron board approval. This consideration will give rise to a profit on disposal of R134 million before tax, which will be treated as a capital item and will fall outside of headline earnings. Condition precedent to the disposal The disposal is subject to approval by the Altron board by 21 January 2014 (or such later date as may be agreed by the parties in writing). Financial effects Before and After the disposal
Categorisation of the disposal The disposal has been categorised as a category 2 transaction in terms of section 9.5(a) of the JSE Listings Requirements. Click here for original article | |
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