Econet buys out Altech from EWG joint venture

1 Sep 2005

Econet Wireless International has agreed to buy its South African partner Allied Technologies (Altech) out of their telecoms joint venture Econet Wireless Global (EWG). Altech, which bought 50% plus one share of EWG for USD70 million last November, is selling its stake for USD87.5 million after an application made last month to wind up the firm failed. ‘The relationship between Altech and the other shareholders of EWG has irretrievably broken down, which has resulted in EWG being unable to conduct its business in the manner contemplated by EWG’s shareholders,’ Altech said in a statement.

The pair’s relationship soured over EWG’s activities in Nigeria, where it holds 5% of cellco V-Mobile and is fighting a legal battle to prevent the operator from selling a controlling stake in the business to Econet’s rival Vodacom. Altech, which is a technology supplier to Vodacom, did not back Econet’s stance and tried to persuade its partner to accept a 10% stake in V-Mobile and let Vodacom buy 51%. But Econet refused and the relationship collapsed entirely. EWG does not include Econet’s South African assets, its mobile firms Econet Zimbabwe and Econet Wireless Kenya, and businesses in Lesotho.

South Africa