Altron is actively pursuing a partial or full sale of its set-top box manufacturing business, Altech UEC, TechCentral has established reliably from two well-placed sources.
The group, which is disposing of noncore assets in a restructuring process that will see it focus on its core technology businesses, is using the asset sales to reduce the level of debt on its balance sheet.
TechCentral has learnt that Altron has begun shopping UEC, which has performed poorly in recent years, to parties that might be interested in buying it, or at least taking an equity stake in the company.
Altron CEO Robbie Venter told TechCentral on Friday that it would be “premature” to comment. “As soon as we have anything of relevance, we will make an announcement on Sens (the stock exchange news service),” he said.
Venter said Altron has previously communicated plans to dispose of its manufacturing assets and UEC, he said, falls into the manufacturing category. “We are exploring options there, but no final decision has been taken.”
He said the group has had discussions about potential partnerships and is also keen to explore ways of improving UEC’s empowerment profile. “But it is premature to make any statement,” he added.
The news of the UEC discussions comes just days after Altron announced it had reached agreement to sell subsidiary Powertech’s 75% equity stake in Aberdare Cables to China’s Hengton Optic – Electric International.
Hengton is a large power and fibre-optic cable manufacturer listed on the Shanghai Stock Exchange.
Powertech will sell its 75% holding in Aberdare Cables, while Aberdare International will dispose of 100% of its shareholding in Aberdare Europe to Hengtong, Altron said.
In a statement, Altron said the price payable by Hengtong for the assets will be based on an equity value of R1bn in respect of Aberdare Group. In addition, Hengtong will take on Aberdare Group debt of R232m.
In February, meanwhile, Altron completed the sale of the subscriber bases belonging to Altech Autopage to MTN, Vodacom and Cell C. That deal raised in the region of R1,5bn.
In the six months to 31 August 2015 — Altron’s most recently published results — Altech Multimedia Group, which houses UEC, reported a loss before interest, tax, depreciation and amortisation of R158m on revenue of R418m. Year on year, revenue at Altech Multimedia plunged by 65%.
Altech’s UEC revenue can be highly volatile given its reliance on a relatively small number of high-value contracts, mainly from broadcasters.
Altron’s share price closed on Thursday at R5,25/share. The counter has lost 65% of its value in the past 12 months. — © 2016 NewsCentral Media