Altech Technologies, the telecommunications, multi-media and information technology (TMT) group, and the international Econet Wireless Group (EWG), have signed an agreement whereby the Altech group has purchased 50% of EWG for $70m (£39,000).
Altech believes this transaction positions it favourably in the high-growth cellular (GSM) network operator market within the African continent and beyond.
Altech’s said that the soon to be renamed Newco has been incorporated and registered in South Africa for the sole purpose of implementing a proposed amended transaction.
Altech chief executive Craig Venter said he was pleased that, after months of intensive due diligence and negotiations, an agreement had finally been signed.
Newco’s board will be chaired by Craig Venter, while chief executive will be EWG chief executive, Strive Masiyiwa. Chief operating officer is reportedly Altech's executive of business development, Wessie van der Westhuizen. Venter said additional specialised skills have been brought into the company, and more will follow.
Venter said the new agreement differed quite substantially from the announcement a few months ago.
“It has been decided in the new agreement to exclude the TSMI shareholdings in both Econet Wireless Kenya and Mountain Communications in Lesotho,” he said.
TSMI is the international investment company of the Masiyiwa family, the founder of EWG. The first announcement of an acquisition had announced a possible 50/50 joint venture between Altech and TSMI.
Venter added that, subsequent to the previous announcement, EWG has also secured the exclusive right to acquire control of a new investment, namely a 51% shareholding in Telikom Papua New Guinea (Telikom PNG). This would be subject to final government approvals, which are expected shortly.
Venter said the most significant conditions precedent to the new proposed transaction have been fulfilled, with the exception of approval of the Exchange Control Division of the SA Reserve Bank, the share sale and purchase agreement with respect to Telikom PNG becoming unconditional, and EWG entering into agreements whereby it will acquire the interests of TSMI and a Botswanan consortium in Mascom.
“The fulfilment of these conditions is expected shortly, and shareholders will be advised of progress in this regard as events occur,” he said.
Venter said that Newco will have an immediate controlling interest in all the companies, excluding, for the time being, those in Nigeria and in Mascom.
However, he added that, in terms of the new agreement, Newco’s shareholding in Mascom had already been increased to a substantial 40%, from the previously announced 26%.
Written by Computing SA staff