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Altech empowers Netstar

Candice Jones
By Candice Jones, ITWeb online telecoms editor
Johannesburg, 14 Dec 2009

Allied Technologies will be placing 25.1% of its Netstar group of companies to investment partners, BEE business Thebe Investment Corporation and wholly women-owned company, Identity Partners.

Speaking at a media briefing this morning, Altech CEO Craig Venter said the deal is the biggest BEE transaction the company has ever completed. “We are excited about that,” he added.

The Netstar Group has a fair market value of around R1.5 billion, creating a lucrative opportunity for the new investors which will be paying the value in dividends to Altech until it's made up. Venter says Netstar is the second top money spinner in the Altech Group, and the dividend payout is likely to happen within “a handful of years”.

Altech has created a holding company called Newco, which will hold the entire value of Altech's Netstar companies. Identity Partners will then take on 20% of the 25% and Thebe will take on the rest.

Vusi Khanyile, chairman of Thebe explained that the company has a large incentive to see revenues and market share rise, since the sooner the investment is paid off, the sooner the company can take home the profits.

“We will be actively growing the business and participating in growing revenues,” he said.

While Altech Netstar's vehicle tracking division has traditionally performed well, already holding 40% of the market share, Venter says the new partnership will boost its fleet tracking footprint in the government spheres.

Khanyile added that Thebe is also looking to boost its government profile through the investment in the business.

Altech has been playing aggressively in what has become one of the most dramatic economic downturns in history. Venter explains that the company's healthy balance sheet has allowed it to take on good deals and is planning on doing several more over the next few years.

According to Venter, the company is also in discussions to boost the BEE profile of its UEC division, which manufactures TV decoders for a global market. The division is hoping to play a key role in the roll-out of decoders to the vast majority of South Africans next year, when the migration of broadcasting from analogue to digital kicks in, in earnest.

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