May 16, 2008
Altron still believes single listed entry point is the way to goBack
Last year, Altron withdrew its bid to acquire the 38,2% of the issued ordinary share capital of Altech it did not already own, follow-ing opposition from the State-owned Public Investment Corporation (PIC), which is a key Altech shareholder.
However, speaking at a presentation held at the JSE auditorium last week, CEO Robert Venter indi-cated that it was still keen on pursuing a simplification of the group’s structure, indicating, though, that it was a “process, not an event”.
Speaking separately to Engineer-ing News, Venter said that it was continuing to engage on the issue internally and externally, including with the PIC, as it was convinced that significant benefits would flow both for the company and its shareholders.
The main benefit would be in creating an environment where capital could be allocated from the centre, with the current situation, where most of its R2-billion in cash resided within Altech, limiting efficient capital allocation.
In fact, as of year-end, R1,6-bil-lion worth of that cash resided within Altech, which was led by Venter’s brother, Craig Venter – some of that money had subsequently been spent on three acquisitions concluded post year-end.
Venter also told Engineering News that the initial rationale for the proposed buyout of minorities at both Bytes Technologies (which was successfully completed last year)and Altech (which was thwarted) was to enlarge the scale of the single entry point to that of an Alsi 40 company.
Such scale was perceived as especially necessary to attract interest from international investors and investment funds.
He indicated that the main constraint to achieving the goal remained that of convincing the PIC, while ensuring that any ensuing deal did not lead to an erosion of the Venter family’s controlling interest in Altron.
The other proviso was to achieve a transaction without overly leveraging the company’s balance sheet, with Venter insisting that it had no intention of raising a “couple of billion rand” simply to buy out minorities.
“So, it might take a little longer to generate that cash internally and we will then review the situation,” he added.
When Venter took over at Altron in 2001, the group had six listed entry points, which had been reduced to two following the buyout of the Bytes minorities.
Earlier in the presentation, it was indicated that the timing could involve anywhere between six months and three years, with Venter adding that the board had again discussed consolidation options at its recent meeting.
However, he stressed that nothing formal was on the table.
“All options will be considered,” Venter added, stressing that these would continue to take account of the company’s performance, the relative share price values, and the impact a transaction would have on Altron
In the meantime, Altron would be keen to buy back its own shares as well as buy more of Altech.
However, it had only limited leverage to do so and it would, thus, seek additional authority to do so at its next annual general meeting.
“Some of our best buys have been either to buy back our own shares, or to buy out partners in businesses we already own and know well,” Venter concluded.
Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
To subscribe email firstname.lastname@example.org or click here
To advertise email email@example.com or click here
Other News This Week News
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...