Econet 'doesn`t need Altech`

By Damaria Senne, ITWeb senior journalist

Johannesburg, 11 Aug 2005

Econet Wireless Global would be able to comfortably finance an amicable settlement with Altech, said CEO Strive Masiyiwa.

Masiyiwa said there have been numerous offers from potential investors to purchase the Altech stake.

He was addressing journalists at a media briefing at the Econet offices in Sandton yesterday.

The briefing was held subsequent to a hearing in the high court of SA, where Altech has launched an application to prevent Masiyiwa from proceeding with an independent inquiry into allegations of racist remarks by an employee seconded by Altech to Econet Wireless Global. The case was moved to 18 August.

Altech has also filed an application with the Botswana high court for the winding down of Econet Wireless Global, a joint venture with the Econet Wireless Group.

[VIDEO]According to Masiyiwa, there was no justifiable reason for litigation when the relationship between the two companies broke down. Altech has communicated in a statement that they are a willing seller and Econet is a willing buyer, thus there should be no conflict.

Position of strength

According to Econet, it partnered with Altech because in addition to the financial investment, Altech did not threaten its vision. The agreement also made it clear that Econet would manage the joint venture with Masiyiwa at the helm. It was therefore within his scope of duties to take action over the alleged racist comment.

Masiyiwa also questioned Altech`s application to wind down the partnership, claiming that Econet had pre-emptive rights. He emphasised the company was operational and had employees before Altech came along and winding down its affairs would be failing them.

Masiyiwa reiterated that the Econet Wireless Group`s stake in the joint venture was not for sale, at any price. He said the licence to operate in Botswana was under strict regulations and that Altech does not meet the requirements to serve as a technical strategic partner to the Botswana government.

Masiyiwa said it would have been to both companies` common interest to go for arbitration and to ask for an independent evaluation of the shares, rather than taking the litigious approach. Econet would then have purchased the Altech stake at what they would consider a fair value.

'`A judge cannot rule that we pay Altech the $100 million for the stake as it is not within his/her competency to value shares in a company,`` Masiyiwa said. The more likely scenario, he said, is that the judge would appoint a banking institution and instruct them to value the shares, which would bring them to the same position.

The way forward

Masiyiwa said the Econet Group is not bound by the agreement any more and can therefore continue with their expansion plans.

'`As an operator, we are not short of opportunities,`` he said.