Altron remains determined to buy out minority shareholders in subsidiary Altech and delist it from the JSE, despite a previous attempt at a deal being rejected by minority shareholders in Altech.

Altron made an offer to minorities in 2007 to buy out and delist both Bytes Technology Group and Altech, but only Bytes shareholders accepted the offer. Bytes was subsequently delisted and is now a fully owned subsidiary of Altron.

Robbie Venter, CEO of Altron, which owns 56,5% of Altech, tells TechCentral that having one listed entry point into the group makes most sense.

“We have indicated to the market consistently over the years that we see great benefit in having one listed entry point into the Altron group,” Venter says.

“That would allow us to leverage off the convergence that’s happening … and there would also be capital allocation benefits where we might be borrowing in one area of the group and our cash might be sitting at Altech. That’s not efficient because the only way to get the cash out of Altech would be through a dividend as we don’t own 100% of it.”

He says the reasons for wanting to delist Altech in 2007 “still apply”. But, he says, it’s important that a transaction “makes sense for both Altech and Altron shareholders”.

“It’s something we are continually evaluating,” he says. “There are no plans to do something in the near future, but it’s certainly something that remains on the radar screen of both the Altech board and the Altron board. In the long term, it remains the right structure for the group.”

Altron on Tuesday published its interim financial results for the six months to the end of August 2011. Headline earnings per share fell by 16% as a result of tough economic conditions and a poor performance by Altech’s operations in East Africa.

The group says that given the “difficult environment”, it will will “continue to concentrate on the basics of cost control and working capital management”.

Its emphasis is increasingly on growing revenue, which it says is a “prerequisite for a return to profitable growth after having effected significant cost reductions in the business over the previous two years”. — Duncan McLeod, TechCentral