Altech ups stake in Altech NamITech

Johannesburg, 14 Mar 2007

JSE-listed Allied Technologies (Altech) has bought German smart card firm Giesecke & Devrient's minority stake in Altech NamITech.

Altech yesterday said it had acquired the German company's 11% shareholding, taking its stake up to 72% of Altech NamITech. The company provides the group's cellular SIM cards, prepaid vouchers, magnetic stripe bank cards and smart cards.

Empowerment partner Pamodzi retains its shareholding of 28%.

In a statement to shareholders, Altech CEO Craig Venter says one of the reasons for the initial partnership with the smart card company "has always been technology transfer from one of the world's premier smart card companies to Altech NamITech. Given our acquired depth of knowledge in embedded technologies, we have mutually agreed the time is right to cut the umbilical, as Altech NamITech aspires to take fuller control of their destiny."

Altech says it will continue to have a commercial relationship with Giesecke & Devrient and represent its products and technology in Sub-Saharan Africa for up to two years. In addition, the companies have reached an agreement regarding technical assistance, supply arrangements and restraints of employees.

Broadening interest

Without Giesecke & Devrient as a shareholder, Altech will be able to add other technologies from alternative providers to its portfolio.

In September last year, Altech told shareholders that in the six months to August, the continued strength of the rand, pricing pressures and management issues had a severe adverse impact on Altech NamITech's local operations. This resulted in "significant underperformance against its prior results".

However, the group said the roll-out of Europay/MasterCard/Visa-compliant smart cards in the South African banking industry, together with a re-engineering process and cost-reduction exercise, would reposition Altech NamITech as a strong contributor to the group's earnings.

As for its African operations, Altech said last year its prepaid cellular voucher manufacturing facility in Lagos, Nigeria, was profitable and producing over a million vouchers per day.

Venter says the Nigerian operation provides more than 55 million cellular prepaid top-up vouchers a month to five major cellular network operators and other customers.

Altech's shares closed up yesterday to reach a 12-month high of R71.99. Monday's close was R70, while its 12-month low is R47.17.