South African technology firm, Altech, is officially out of the Kenyan market marked with the sale of a stake in UK Company Liquid Telecom that it acquired last year in exchange for shareholding in Kenya Data Networks (KDN).
Altech sold a shareholding which they acquired in February last year at 8.6 percent stake that it owns in Liquid Telecom for $55 million.
“Altech has exercised its put option and has entered into an agreement with, inter alia, Econet Wireless Global Limited to dispose of its 8.6 percent equity interest in Liquid for a cash consideration of $55 million, giving a profit rise of $15.1 million before tax,” said Altech in a statement.
The filings with Johannesburg Securities Exchange (JSE) value Liquid Telecom’s business across Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, Democratic Republic of Congo, Lesotho and South Africa at $640 million.
Altech also intends to clear debts with the chunk of money they have profited from.
“The cash consideration from the disposal will be used to reduce the Altron group’s net debt position following the scheme of arrangement between Altron and Altech, completed on 19th August 2013,” added the statement.
Liquid operates fibre infrastructure in the southern and central Africa and is partly owned by Econet Wireless Global, the company founded by Zimbabwean telecoms tycoon Strive Masiyiwa.
Altech was initially operating through KDN which it co-owned with businessman Naushad Merali. The duo reduced their shareholding after they sold a combined 80 per cent stake to UK-based Liquid Telecom, a year ago, in a deal that resulted in KDN rebranding to Liquid Telecom.
Should the board approve the sale it will result in Econet Wireless tightening its grip on the telecoms business at it is the largest shareholder in Liquid Telecom. Altech said that once the board approves, Econet is expected to pay Altech the cash by February 28.