Altron close to selling off set-top box subsidiary
Allied Electronics (Altron) will finalise the disposal of wholly owned subsidiary Altech UEC within two to three months, says Altron CEO Mteto Nyati.
The looming disposal of Altech UEC, the developer and manufacturer of set-top boxes, is part of Altron’s plans to position itself as an information and communications technology (ICT) player.
Altech UEC is among noncore assets that the listed technology group has earmarked for disposal during the current financial year.
The company last week announced the conclusion of the sale of its 80% interest in Powertech Transformers to a broad-based black economic empowerment consortium comprising Europe’s number one medium-sized manufacturer of transformers, SGBSMIT, and local black-owned Power Matla Group.
Nyati said the company was in the final stages of concluding the disposal of Altech UEC.
“We believe that in the next two to three months, that should be concluded. Of course, it still needs to go through the Competition Commission. But when we announce our results, we feel that we will be in a position to say to the market that [the deal] has been concluded. It is the same with CBI Telecom Cables. We feel that we are further down the line to conclude a sale there,” he said.
Nyati said Altron decided to focus on ICT after an analysis of its operating environment.
“In the past, we may have entered some of these markets or manufacturing largely because of sanctions. We were filling a gap that was open when some of the companies left SA. But those conditions have long changed,” he said.
Altron’s manufacturing businesses could not compete with larger players globally because they relied on one or two customers, he said. “So the economies of scale are not there. If you are competing with global players in China that are selling across the world, your cost structure is way out of line. It did not make sense for us to continue to be in those businesses.”
Altron had a presence in six African countries but the company wanted to improve accessibility to its products, Nyati said. “We want to make sure that in each and every country where we are operating in the rest of Africa we represent the full breadth of Altron offerings.”
Nyati said the company had identified so-called growth countries in the rest of Africa “and those countries are largely in the Southern African Development Community and some are in West Africa”.
In identifying the “growth” countries, the company had assessed country risk, growth potential, stability and rule of law, he said.
“That work has been done and will inform our strategy of entering those countries.”
ALTRON HAS DECIDED TO FOCUS ON ICT AFTER AN ANALYSIS OF ITS OPERATING ENVIRONMENT