South Africa’s Altech buys 50% of Econet

31 Aug 2004

South Africa-based multimedia and telecoms group Allied Technologies (Altech) has announced that it has purchased a 50% stake in Econet Wireless Holding (EWH) for USD70 million, paving the way for the creation of a new joint venture company (Newco), which will have a pro-forma turnover of around USD200 million. In January this year EWH’s parent TSM and Altech jointly announced plans to form the new 50:50 venture to establish a South African-based telecommunications company initially valued at around USD140 million. Newco will have a board chaired by Altech and a management team led by EWH officials together with Altech, and will look to expand its presence in Africa as well as position itself as a player on the global stage. Initially Newco will not include EWH or its subsidiaries and international assets, but these units will be incorporated into the joint venture when political, regulatory and economic conditions permit. Altech will subscribe for Newco shares worth 50% of the entire capital for USD70 million, while TSM will take the balance through the injection of its EWH wireless assets. Under the agreement, however, TSM shareholdings in Econet Wireless Kenya and Mountain Communications Lesotho will not be included at this time. Econet has also secured exclusive rights to acquire control of a new asset, namely a 51% stake in Telikom Papua New Guinea.

South Africa