24 June 2011
Intel Capital, the investment division of global semiconductor giant Intel, is to invest a convertible loan of US$5-million in South Africa’s Allied Technologies (Altech), in a deal that will see the two companies working to accelerate the adoption of broadband services in Africa.
According to a statement by Altech, the investment will form part of an ongoing strategic business relationship that will explore various areas of collaboration in the telecommunications, multimedia and information technology sectors across Africa and other applicable emerging markets.
Altech CEO Craig Venter told TechCentral this week that the investment was evidence of new market opportunities that are emerging as large-scale broadband communications infrastructure becomes available in South Africa, West Africa and East Africa.
“As demand for more services grows, we will see more investment in communications infrastructure and the resultant services that follow on top of that infrastructure, be it mobile, broadband or data,” he said.
Altech said the convertible loan has a term of 3 years and will bear interest at a fixed rate calculated with reference to the 3-year LIBOR USD swap rate plus 3% per annum.
Intel capital also has the option to convert the loan into ordinary Altech shares at any time between the first and third anniversaries of the date from which the transaction is effective.
“The board of Altech is of the opinion that the proposed transaction will benefit shareholders and, accordingly, recommended that shareholders vote in favour of the resolution,” the company said in a statement this week.
Shareholders will be asked to vote on the transaction at a general meeting scheduled for 20 July, while the transaction is expected to be finalised on or before 1 August.
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