The deal sees Liquid Telecom take on assets from Altech spanning a number of African countries, including a 61 percent stake in Kenya Data Networks (KDN), as well as service providers in the Democratic Republic of Congo (DRC), Rwanda, and Uganda.
In exchange, Altech will take a 8.6 percent minority shareholding in Liquid Telecom with 10 percent shareholder voting rights and subscribe US$16.5 million in cash, with speculation that the telecommunications group may also keep an option to increase its shareholding in the future.
Altech announced the deal on the Johannesburg Stock Exchange today, although the transaction will only be final once approved by authorities in the DRC, Kenya, Rwanda, Uganda and Zambia.
“Liquid has been building and investing in a high-quality pan-African fibre network for many years and this deal will accelerate our progress by enlarging our network footprint and complementing our existing product portfolio. We are a strong and ambitious company and have a long-term investment plan for all the companies we are acquiring,” commented Nic Rudnick, Chief Executive Officer of Liquid Telecom.
Altech is also pleased with the agreement, having been looking to divest of the struggling Kenyan operations in particular for some time now. The firm sold off its West African operations in September.
“As shareholders are aware, our East African activities have been problematic and unprofitable, recently, and we have previously expressed the intention to deal effectively with these challenges,” said Craig Venter, Chief Executive Officer of the Altech Group.
“The Liquid transaction opens a positive new chapter for Altech in partnership with a group with proven expertise in its sector.”
The Liquid-operated network is now the biggest fibre-optic network in southern Africa, providing fixed-line connections in a number of countries where no such option existed prior to Liquid’s entry. While mainly operating as a wholesale carrier, Liquid also acts as an operator in Zambia and Zimbabwe.