The imminent sale of Altron subsidiary Altech Autopage's subscriber base to SA's major telecoms operators means around 500 staff will be redeployed or retrenched.
Autopage says MD Boyd Chislett has been engaging with staff since May, when news of the sale first became public. Autopage HR executive Teresa Badenhorst says staff turnover spiked immediately after Chislett informed staff of the potential sale on 12 May.
"However, it did settle following the one-on-one employee engagement discussions, where employees were provided with the full detail of the retention bonuses should they stay until the end," she says.
In September, Altron confirmed it would sell its Altech Autopage subscriber base to MTN, Vodacom and Cell C for almost R1.5 billion. On 2 December, Alton confirmed 99.99% of shareholders voted for the disposal of Autopage's subscribers at the JSE-listed firm's annual general meeting.
Autopage says retrenchments will be unavoidable should the deal be approved by the competition authorities.
"We will support all employees to the best of our ability, including assisting them with information regarding UIF compensation, and the employee assistance programme will be offered for three months post-closure, with current benefits," she says.
Altron has agreed to give Autopage staff preference for job opportunities arising within the companies under its umbrella.
"We've met with senior management at these companies and, where possible, they will redeploy our staff into their vacancies should the employee qualify - without affecting severance packages," says Badenhorst.
One of these is Bytes People Solutions, which will absorb most of the call centre staff. Badenhorst estimates a large percentage of Autopage's staff will be redeployed within the Altron Group as well as to external companies.
"Autopage has invested heavily in a marketing and retentions campaign to ensure customers remain on the base to avoid erosion of shareholder value by losing customers during this process of negotiation for the company's sale," according to a statement.
Badenhorst says Autopage's strategy was to ensure communication to staff would be transparent and frequent, but admits that despite continuing 'business as usual' for staff and customers "it's been incredibly tough".
"We've worked hard to create and increase performance-based incentives to help maintain motivation and productivity levels as well as minimise the trauma. It's been very successful," adds Badenhorst.
Lean, mean Altron machine
Parent company Altron continues to try make the business more efficient and streamlined after a tough interim reporting period, when revenue dropped 7%. This week, the company announced the relocation of its head offices and the centralisation of shared services as part of Altron's "transition into a leaner, more agile business operation".
To aid cost reduction, Altech and Bytes head offices have been relocated from Woodmead to Altron head office in Parktown, Johannesburg.
CEO Robert Venter says since the release of the company's interim financial results in October, Altron has honed its focus on three areas that will be crucial to future success: business strategy and structure, cost reduction, and assets.
"I am pleased to report we are seeing the benefits of our cost reduction activities and the consolidation of head offices to date has been seamless with no impact on service delivery."
The consolidation will also enable the centralisation of finance, facilities, IT, HR and marketing shared services at an Altron level "to further reduce support service costs, improve functional alignment and enhance efficiencies".
Reducing non-core assets
Venter also outlined plans to refocus and reposition by reducing non-core businesses in the group. This includes focusing more on the IT and telecommunications space, and limiting exposure to the manufacturing sector.
"Altron's future-state will be a smaller, more agile group that is focused on its core IT assets. This will be a stable base from which to grow," Venter said during the recent interim results announcement.
On Monday, Altron announced one of these non-core assets would be disposed of. Subsidiary Powertech will sell Powertech System Integrators to Capitalworks for R140 million, exclusive of VAT.
Today, Altron announced another disposal, as Powertech moves to sell its equity interest in Aberdare Group to China's Hengtong Optic-Electric International. Powertech has agreed to sell 75% of its shareholding in Aberdare Cables to Hengtong, while Aberdare International will dispose of 100% of its shareholding in Aberdare Europe to the Chinese company.
The purchase consideration payable by Hengtong will be based on an equity value of R1 billion in respect of the Aberdare Group. In addition, Hengtong will take over the Aberdare Group debt of approximately R232 million.
Alcon Marepha, CBI Electric Aberdare ATC Telecom Cables and Aberdare Cables Asia are excluded from the deal. The sale does, however, include Aberdare Cables' 70% equity interest in Aberdare Intelec Mozambique Limitada.
Following the disposal, Powertech will retain a 17.5% shareholding in Aberdare Cables for a period of at least two years. Izingwe Aberdare Cables ? the present minority BEE shareholder of Aberdare Cables ? will be entitled to remain as a 30% shareholder, or can choose to sell its shares to Hengtong.
The Aberdare Group is a cable manufacturer that has been in existence since 1946. Aberdare Cables is the largest cable manufacturer in Southern Africa.
Hengtong is a Chinese power and fibre-optic cable manufacturer and is listed on the Shanghai Stock Exchange. It is the fourth largest cable manufacturer in China and among the top 100 largest cable manufacturers in the world. The company considers the Aberdare Group an attractive platform to expand its international business in SA, the rest of the continent and Europe.
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