| Thu 25 Nov 2004, 17:06 | | INVESTMENT BY ALTECH IN EWG |
|
ALLIED TECHNOLOGIES LIMITED/ ECONET WIRELESS GLOBAL LIMITED - INVESTMENT BY
ALTECH IN EWG
ALLIED TECHNOLOGIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/020415/06)
Share code: ALT ISIN: ZAE000015251
(`Altech`)
ECONET WIRELESS GLOBAL LIMITED
(Incorporated in Botswana)
(Registration number 2002/1140)
(`EWG`)
INVESTMENT BY ALTECH IN EWG
Shareholders were advised in announcements dated 21 January and 30 August 2004,
that Altech and the shareholders of EWG (collectively referred to as `TSMI`),
intended to establish a jointly-controlled South African holding company
(`Newco`) and that certain telecommunication interests of EWG and cash funding
from Altech were to be introduced into Newco. TSMI is currently being
restructured into Econet Wireless Ventures Limited (`Econet Ventures`), a
company registered in the British Virgin Islands (`BVI`).
Altech shareholders are now advised as follows:
1. The South African Reserve Bank`s Exchange Control Department (`the SARB`)
has approved the investment by Altech in EWG. Furthermore, the agreements
relating to the indirect acquisition by EWG of the 14% interest in Mascom
Wireless Botswana (Pty) Limited (`Mascom`) held by Econet Wireless Holdings
Limited (`Econet Zimbabwe`) have been finalised and that transaction has been
approved by the Reserve Bank of Zimbabwe. Accordingly, two out of the three
outstanding conditions precedent to the EWG investment by Altech, specified in
the announcement of 30 August 2004, have now been fulfilled.
2. Significant progress has been made in the process of obtaining fulfilment
of the final condition precedent to the transaction, namely approval of the
proposed investment by EWG, through Econet Wireless PNG Limited (`Econet PNG`),
in Telikom PNG Limited (`Telikom PNG`), by the government of Papua New Guinea.
Finalisation of certain details of the transaction is advancing and is expected
imminently. In the meantime, Altech has elected to exercise its right to waive
the requirement for the fulfilment of this condition, to accelerate the
implementation of the overall transaction.
3. Altech and TSMI have agreed to simplify the structure resulting from the
transaction, by the elimination of Newco. Altech will now invest directly into
EWG, the issued ordinary shares of which will be held 50% plus one share by
Altech, via a cash subscription. This is to satisfy the SARB requirement for a
South African shareholding in excess of 50%.
4. TSMI will exchange its telecommunications interests selected for this
purpose for the issue of ordinary shares in EWG, such that its shareholding will
amount to 50% less one share. TSMI will have a call option to equalise its
shareholding in EWG with that of Altech in the future, directly or indirectly,
via a structure or mechanism that will comply with SARB and any other relevant
regulatory requirements at that time.
5. Altech and TSMI have entered into a voting pool arrangement with regard to
EWG, in terms of which key decisions affecting EWG will be jointly agreed. This
arrangement, coupled with the TSMI option referred to above, will be reflected
in the proportionate consolidation of the financial results of EWG in both
Altech`s and Econet Ventures` financial statements.
6. The funds earmarked for the Telikom PNG transaction, being US$30 million,
will be held in a Rand-denominated South African bank account in the name of EWG
until the Telikom PNG agreement becomes unconditional, permitting their
deployment in terms of that agreement. In the meantime, all interest earned on
this account will accrue to Altech.
7. Altech and TSMI have agreed that TSMI`s direct or indirect shareholdings in
the following South African companies will be excluded from the transaction:
Independent SMS (Pty) Limited - 50%;
Worldstream (Pty) Limited, a dormant company - 100%; and
Econet Wireless International (Pty) Limited - 100%;
(together, `TSMI`s South African interests`)
in addition to the other TSMI assets referred to as excluded in the
announcement of 30 August 2004. TSMI`s South African interests currently make no
positive financial contribution by way of net assets or earnings to TSMI`s
overall telecommunications interests. The effect of the above and the
elimination of Newco will be to render the transaction and the resultant EWG
corporate structure wholly external to South Africa.
8. Accordingly, the assets that are currently the subject of the transaction
are the relevant shareholdings of TSMI in the following companies:
Mascom - 40%;
Econet Wireless New Zealand Limited (`Econet New Zealand`) - 65%;
Econet Wireless International Limited (`Econet International`) - 100%;
Econet Wireless Limited (`EWL`) - 100%;
Econet Satellite Services Limited (`Econet Satellite`) - 100%; and
Econet Wireless Nigeria Limited (`Econet Nigeria`, recently renamed Vee
Networks Limited, trading as V-Mobile) - 5%.
9. The excluded assets of TSMI referred to above - other than TSMI`s South
African interests, but including a minimum 51% shareholding interest in Econet
Zimbabwe, TSMI`s shareholdings in Econet Wireless Kenya Limited (`Econet Kenya`)
and Mountain Kingdom Communications (Pty) Limited (`MKC`) of Lesotho - may be
acquired by EWG at fair market value in the future, pursuant to a right of first
refusal granted to EWG, should the shareholders of EWG determine accordingly.
10. As indicated in the announcement of 21 January 2004, should any future
acquisition of any of the excluded assets result in Altech having fewer shares
in EWG than Econet Ventures, then Altech shall be entitled to equalise its
shareholding with that of Econet Ventures through a cash subscription for new
shares or the acquisition of existing shares, as applicable.
11. The following will be the resultant structure of the EWG group, on the
assumption that the Telikom PNG transaction will proceed - (see press for
details).
12. On the basis that the Telikom PNG investment by EWG is expected to proceed
shortly, the amendments to the overall transaction referred to above have no
material impact on the pro-forma financial effects on Altech as disclosed in the
announcement published on 30 August 2004.
13. As all of the conditions precedent to the investment by Altech in EWG have
been fulfilled or waived, this transaction will now be implemented.
Johannesburg
25 November 2004
Investment bank to Altech
STANDARD BANK
Corporate advisor to EWG
METIER
Sponsor to Altech
CAZENOVE
Corporate law advisor to EWG
PAUL BOTHA & ASSOCIATES (PTY) LTD
Attorneys to Altech
H R LEVIN
Attorneys, Notaries and Conveyancers
Auditors of Altech
Fisher Hoffman PKF (Jhb) Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration number 1994/001166/21)
