Altech offloads KDN to Econet Wireless
MONEY & MARKET
By - | January 30th 2013
By Jevans Nyabiage
The firm now operates a fibre network spanning nine States, from Kenya to Zambia
Technology firm Altech has made a dramatic retreat from its earlier promise to keep firm hold of Kenya Data Networks (KDN).
Altech, which is listed on the Johannesburg Stock Exchange (JSE), announced that it is selling its troubled East African operations in a complex deal that will see fibre infrastructure firm, Liquid Telecom, take over the assets.
Liquid, which operates fibre infrastructure in Southern and Central Africa, is majority owned by Econet Wireless, the company founded by Zimbabwean telecoms tycoon Strive Masiyiwa. Econet Wireless is making a re-entry into the market after it quit the scene and sold its stake in YuMobile to Essar Group.
In a statement, yesterday, Altech confirmed it had transferred the entirety of its East African operations – including a 61 per cent stake in KDN – to Liquid Telecom. Altech will subscribe $16.5 million (Sh1.4 billion) in cash for 8.6 per cent ownership in Liquid, with voting rights of 10 per cent.
“The Liquid transaction opens a positive new chapter for Altech in partnership with a group with proven expertise in its sector,” Altech Group CEO, Craig Venter, said.
Besides KDN, other Altech properties that Liquid is taking over are Africa Data Networks with operations in the DRC, Swift Global – a provider of voice, data and mobility solutions in Kenya, Uganda and Rwanda – Stream, a service provider in Rwanda and InfoCom, an Internet service provider in Uganda.
“Liquid has been building and investing in a pan-African fibre network for many years, and this deal will accelerate our progress by enlarging our network footprint. We are a strong and ambitious company and have a long-term investment plan for all companies we are acquiring,” said Nic Rudnick, CEO of Liquid Telecom.
“Like us, KDN has built the largest fibre network in East Africa and we believe that it is a company with huge potential. I strongly believe that its people, its network and its customer base will all add value and opportunity to our current operations.”
The deal has to be approved by regulators in the DRC, Kenya, Rwanda, Uganda and Zambia.
KDN, including other Altech owned assets in the region, has been struggling to break-even in a highly competitive market, a fact that has dragged heavily on the group’s performance.
Altech says the businesses have been affected by network instability, reliability, and the loss of big telecom clients choosing to build their own networks instead of relying on third-party suppliers.
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