Altron is continuing to shed assets as it restructures its business to become as a more focused and leaner technology group.
It announced on Thursday before markets opened that it has reached an agreement to dispose of subsidiary Powertech’s 75% equity stake in Aberdare Cables to China’s Hengtong Optic – Electric International.
Hengtong is a large power and fibre optic-cable manufacturer and 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.
Alcon Marepha, CBI Electric Aberdare ATC Telecom Cables and Aberdare Cables Asia are specifically excluded from the sale.
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.
“Hengtong will be entitled to adjust the purchase consideration in accordance with an agreed formula … between the parties and included in the transaction agreements, which takes into account various factors including cash, debt and working capital.”
Altron said it will use the proceeds of the sale to reduce group debt.
Following the disposal, Powertech will retain a 17,5% shareholding in Aberdare Cables for a period of at least two years. After this period, it will be entitled to sell its remaining shareholding to Hengtong on the same basis as the disposal of the initial 75% shareholding.
The Aberdare Group was founded in 1946. It specialises in the manufacture of low- and medium-voltage electrical cables for application in power generation, power transmission, power distribution, rural electrification, rail, petrochemical, mining, ports, airports, wholesale, construction and domestic building environments, Altron said.
Aberdare Cables has three manufacturing sites and six customer service centres in South Africa. It also has international manufacturing and sales sites in Portugal, Spain, Namibia and Mozambique. — © 2015 NewsCentral Media