Struggling technology firm Allied Electronics Corporation (Altron) announced on Wednesday plans to sell Powertech Transformers through a sale of shares in the next 12 months and may also sell some of its manufacturing operations. By Staff Writer
The firm, which is exploring strategic equity and technology partnerships with global industry players in other areas of the business to revamp the company, said Power Transformers has been classified as held-for-sale and as a discontinued operation.
“In the light of challenging market conditions the board felt the business would be better placed within a global industry player to benefit from less dependency on the South African market and exposure to global best practices. The operation is expected to be disposed of through a sale of shares in the next 12 months,” the firm informed investors.
Powertech Transformers has been negatively impacted by a decline in orders from power utility Eskom.
Meanwhile Altron reported a 7% decline in revenue to R13.3 billion for the six months to end-August. The group earnings before interest, tax, depreciation and amortisation fell by 69% to R241 million.
Headline earnings per share – South Africa’s main profit gauge – dropped to a loss of 64 cents versus a profit of 72 cents in the same period in 2014.
During the period under review, Altron announced that Autopage’s mobile subscribers would be sold for R1.5 billion to MTN, Cell C and Vodacom.
The company also announced the closure of Altech Node, which was seen by many commentators as ‘South Africa’s Netflix’ to compete against pay-TV operator MultiChoice and other video-on-demand services.
The sale of Powertech Transformers, Autopage and closure of Altech Node is part of Altron’s plans to restructure the group in preparation for a strategic equity partner.
The company further advised investors that it has identified manufacturing operations, where it is considering an equity partnerships with global industry players, outright disposal or closure.
“This, along with the steps already taken, will reduce or eliminate many of the entities that are currently detracting from the solid performance of the core IT assets,” the company said.
Altron will utilise the proceeded from all the sales to reduce its borrowings which were raised predominantly during the acquisition of the minority shareholders’ shares in Altech, and the exit from Altech East Africa.