Chinese invest R1.2bn in Altron unit
Altron has sold 75 percent of its cables unit, Aberdare Cables, to Chinese firm Hengtong Optic - Electric for R1.232 billion.
|||Johannesburg - Altron has sold 75 percent of its cables unit, Aberdare Cables, to Chinese firm Hengtong Optic - Electric for R1.232 billion.
The JSE-listed company explains the disposal is a step towards finding suitable equity partners to take them forward.
Hengtong will pay R1 billion in cash and the rest will be taken up through debt.
As part of the deal, Aberdare International will dispose of its shareholding in Aberdare Europe comprising its Spanish and Portuguese operations to Hengtong.
Altron’s cables business turned over R5.1 billion in the last financial year, which was about flat, but improved earnings before interest, tax, depreciation and amortisation by 74 percent.
The deal excludes Alcon Marepha, CBI Electric, Aberdare ATC Telecom Cables and Aberdare Cables Asia.
Listed on the Shanghai Stock Exchange, Hengtong is the fourth largest cable manufacturer in China and one of the largest cable manufacturers in the world.
In a statement issued on Thursday, Altron notes Hengtong's scale and expertise makes it a strong strategic partner able to support Aberdare Group's growth strategy through a process of technology innovation, product expansion, systems development and technical expertise.
CEO Robert Venter says “this is another positive step in the implementation of our strategy to identify committed equity partners best suited to support the needs and growth ambitions of our manufacturing businesses, an area of the group in which we have opted to reduce our exposure”.
Aberdare Cables will also have access to Hengtong's operating experience and strong global balance sheet. In return, Aberdare Group offers an attractive platform for Hengtong to expand in South Africa, Africa and Europe.
"Altron is making good progress in reducing our exposure to certain manufacturing assets and using the proceeds to reduce the group's overall debt as well as allowing the Group to focus and grow in the Information Technology and Telecommunication markets. We will continue to seek opportunities that support the creation of a smaller, but far more agile group that has high growth potential," says Venter.
IOL