Altron extends its disposing transactions
The group has been on a mission to dispose of its non-core assets in its manufacturing operations and focus on its information technology and telecommunications business.
It said certain conditions precedent to the transaction were being attended to, and the parties had mutually agreed on an extension for the transaction to close by July 31.
“Altron has been provided with additional contractual assurances from the purchaser with regard to their commitment to finalising this transaction,” the group said.
It is not the first time that Altron has announced a disposal of non-core assets in Powertech. In December last year it also entered into an agreement to dispose of its Powertech System Integrators business to Capitalworks Private Equity Advisor or its nominee for a purchase price of R140million exclusive of value added tax.
The Powertech business has been reported under the discontinued operation in the year to end February results.
The discontinued operations managed to report earnings before interest, tax, deprecation and amortisation (Ebitda) of R8m for the year, improving on last year’s R110m loss.
The group said the main improvement came out of the Powertech Transformers and Altech UEC/Multimedia businesses, which generated strong Ebitda growth.
“The results were further assisted by the reduced costs associated with the closure of the majority of the Powertech group operations.
“Similarly, the after tax loss improved significantly from R717m to R253m, as a result of a combination of improved operational performance and a reduction in the interest expense as proceeds from disposals have been used to reduce debt,” the group said during the results presentation.
Altron has been going through changes recently.
In April the group announced a restructuring of its executive committee to create a leaner group structure aligned to its ICT ambitions.
Chief executive Mteto Nyati said: “Our priorities are to aggressively drive cost efficiencies; recruit, develop and retain top talent; build a trusted ICT brand and accelerate growth. The new structure reflects these priorities while setting the tone across the group on cost focus.”
Altron has also been active on the acquisition front. Last week it announced an acquisition of iS Partners through its subsidiary, Altron TMT, for R225m, which will enable Altron to create a Microsoft-focused business.
- BUSINESS REPORT