JSE-listed Altech says its strategic partnership with Liquid Telecommunications, which will see the creation of the largest fibre network in Africa, has been concluded, as all approvals have been granted.
Altech CEO Craig Venter says the company's operations are now firmly on a path to success and growth. Altech East Africa was profitable for two years after Altech bought its 51% stake in 2008, but then ran into difficulties as key projects were delayed, while the competitive market moved ahead rapidly.
At the end of the first half of 2012, Altech wrote down the operation to nothing, after it made an operating loss of R89 million in the half year.
Earlier this year, Altech announced it had embarked on a realignment of its East Africa interests by redirecting its networking business into a strategic partnership with Liquid, an independent telecommunications group providing diverse services within central and southern Africa.
"Although our initial foray into East Africa was immensely successful, as shareholders are aware, in recent years these activities have been problematic and unprofitable. I promised an effective solution and I believe the Liquid transaction opens a positive new chapter for Altech, in partnership with a group with proven expertise in its sector," says Venter.
Altech will contribute its East African network assets and has subscribed $17 million in cash for an initial 8.6% equity stake in Liquid, with shareholder voting rights of 10%, and the potential to further increase its shareholding in Liquid in the future.
Liquid offers fibre, satellite, infrastructure and international carrier services to fixed and mobile telecommunications operators, Internet service providers (ISPs) and enterprises in developing countries - particularly in central and southern Africa.
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