Altron gets R400m investment
JSE-listed Altron has reached an agreement with Value Capital Partners (VCP) that will see the investment company make a capital investment of R400 million into Altron
The deal is still subject to regulatory and shareholder approval, but if approved it will also see a change to the Altron control structure in line with Altron's previously stated intention to move from a family controlled and managed business to independent management. Altron will issue new shares to VCP which will provide VCP with an approximate 15% stake in the business.
VCP is an investment company founded by Antony Ball, founder and ex-CEO of Brait, and Sam Sithole, ex-CFO of Brait.
"This investment is beneficial for the Altron group as it provides us with the added flexibility to implement our growth strategy in our core IT businesses, exit the non-core manufacturing assets, and create capacity for acquisitive growth," according to Altron non-executive chairman Bill Venter who founded the group 51 years ago.
"VCP has a collaborative approach to unlocking value and is committed to working with the Altron board, Altron management and other stakeholders to implement our strategy to the benefit of all stakeholders".
At the same time, the Venter family has agreed that, should the transaction be successfully implemented, it will result in the collapse of Altron's current control structure through the conversion of the company's low-voting shares into a single class of voting shares.
Venter says he and the rest of the Venter family will remain invested in and fully committed to the company and will thus retain their full economic interest.
"Currently I and the Venter family have a 57% voting position in the Altron Group, but our economic position in the Group is approximately 17.5%. Going forward, the family will maintain its economic position and, subject to regulatory approval, a mechanism will be put in place that will afford the family a 25.1% voting position. This will remain in effect as long as the Venter family holds an economic interest of more than 10% in Altron," he explains.
Venter has also decided that he will retire as non-executive chairman at the end of the company's current financial year and will assume the title of chairman emeritus while remaining a non-executive director of the company. The board of directors will appoint a new independent chairman from within its ranks and will, in due course, continue with the process of recruiting a group CEO as replacement for Robbie Venter, who will then become a non-executive director.
Robbie Venter says the appointment of a new CEO will take place in a phased approach because there are still a number of key projects currently underway relating to the repositioning of the group as a focused, but smaller, IT company. This includes the sale of the non-core assets. Once this process has been effectively completed, the appointed independent leadership would be in a position to grow the business off this solid base.
As part of VCP's investment, Ball and Sithole will join the Altron board which is also looking to appoint new members who have a strong background in IT.
"I am confident that these proposed changes will have a positive effect on Altron going forward and although more work needs to be done, the outlook is extremely positive with respect to getting the group back on a path of profitability and growth that is sustainable," Bill Venter adds.