Altech sells regional business to UK telecom company

Johannesburg-listed technology group Altech is selling its troubled East African businesses to UK fibre-optic telecommunications specialist Liquid Telecom.

On Monday, South Africa’s Altech, which owns a 60.8 per cent stake in Kenya Data Networks (KDN), announced that it had concluded the sale negations with Liquid Telecoms, ending the more than seven months search for a buyer.

Besides KDN, Altech owns a number of subsidiary IT firms in Uganda, Rwanda and the Democratic Republic of Congo (DRC).

The sale will change the ownership structure of the company. Altech is selling its shares in its East African operation — KDN, Swift Global Ltd (Kenya), Altech Infocom (Uganda), Africa Digital Networks (DRC), Altech Stream (Rwanda) and Altech Data International (Kenya) — for an 8.6 per cent equity stake in Liquid and shareholder voting rights of 10 per cent.

Altech now owns a minority shareholding in the Liquid Telecom Group. However, the South African firm has an option to increase its shares in future if it injects $16.5 million in cash.

Liquid, which operates fibre optic infrastructure in Southern and Central Africa, says the deal will grow its footprint in East Africa and help actualise the company’s dream of growing a Pan Africa infrastructure.

In a statement to its shareholders, Altech said its businesses in East Africa have been negatively affected by the depreciating value of currencies, network instability and reliability issues, and loss of big telecom clients such as Safaricom that have chosen to build their own networks.

The deal will enable Liquid Telecoms create Africa’s largest single fibre network spanning Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, DR Congo, Lesotho and South Africa.

“Liquid has been building and investing in a high-quality pan-African fibre network for many years and this deal will accelerate our progress by enlarging our network footprint and complementing our existing product portfolio,” Nic Rudnick, the chief executive at Liquid Telecom, said.

“This network will provide reliable, high-speed, cost-effective connectivity to carriers, ISPs, homes, financial institutions and businesses of all sizes,” Mr Rudnick said.

Source: The EastAfrican, www.theeastafrican.co.ke, reported by Special Correspondent in Nairobi 

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