JSE-listed Allied Technologies has sold a 25% plus one share stake in its set-top box subsidiary to an empowerment consortium, for an undisclosed amount.
The sale comes as the Department of Communications (DOC) finalises a set-top box manufacturing strategy that seeks to aid empowerment companies as SA migrates to digital television.
Altech UEC will now be a quarter-owned by Power Matla, which will have a 65% stake in the consortium, with Epiworx Investment holding 20%, while Empower a Thousand Holdings will own a 15% stake in the consortium.
“Government’s clarification on the digital terrestrial television standard and the ICT industry’s recent interactions with minister Roy Padayachie are clear indications that government recognises that ICT is the catalyst for economic growth in SA,” says CEO Craig Venter.
Venter says the deal will lead to a long-term sustainable relationship with its BEE partners, creating a platform for all parties to benefit from Altech UEC’s business. UEC manufactures decoders for satellite and terrestrial broadcasters.
SA’s move to digital television by the end of 2013, using the upgraded European DVB-T2 standard, is set to create a new electronics industry, because about 10 million households will need decoders to view digital television on older televisions.
The DOC wants to use migration as a catalyst to boost an emerging electronics sector and aid empowerment companies. A draft set-top box manufacturing strategy, which has been on the cards for several years, is being finalised, says spokesman Tiyani Rikhotso.
Padayachie has said the digital terrestrial television set-top box manufacturing scheme could create more than 2.4 million jobs.
Altech, majority-owned by Altron, will form a new company to hold its Africa-based operations. Newco will acquire the business on a loan account, which will allow Altech to sell the stake to the consortium for a “nominal consideration”.
Altech is in a closed period and will tomorrow release its results for the year to February. Last year, UEC turned over R1 billion, a decrease on its 2009 revenue of R1.3 billion which it attributed to downward pricing pressure.
Investment company Power Matla already has a 25% stake in Altron subsidiary Powertech. Epiworx Investment is wholly-owned by black women, and Empower a Thousand Holdings is 75% owned by women.