27 January 2009
AltX-listed Africa Cellular Towers (ACTowers), a manufacturer and supplier of telecoms support systems and electric transmission and distribution lines throughout the continent, has concluded a black economic empowerment deal with the Tiso Group.
As per the transaction, investment group Tiso will acquire a 25.1% stake in ACTowers for a total of R116-million, with the capital being used to expand the production and installation capacity of ACTowers, for manufacturing either mobile telecommunication masts or power pylons.
“We are very excited about the transaction with Tiso, as we now have a strategic black commercial partner who we believe will add real value to the company and who will, as part of the subscription, inject additional cash into the company for expansion,” ACTowers CEO Chris Kruger said in a statement last week.
“Most importantly, this transaction affords us the opportunity to realise the full potential of the ACTowers Power Lines division, in a sector with vast growth opportunities.”
The company’s power lines division has been positioning itself as a full turnkey provider of power lines in southern Africa over the past two year, and has been working with power utilities from around the region.
While ACTowers had been awarded supplier status in certain regions of South Africa by Eskom in 2008, the company now believes that the partnership with Tiso will enable it to successfully tender for larger contracts, as a result of its improved BEE rating.
According to the company, Eskom has embarked on major capital expenditure programmes to upgrade and expand its network of power lines, with an investment in excess of R30-billion having already been made.
Targeting home market
The company’s telecoms division is also expected to benefit from the need to roll out telecoms base stations in Africa for the foreseeable future, it has also begun to target the needs of fixed-line and mobile operators in South Africa – a country not previously focused on by ACTowers.
“The investment by Tiso in ACTowers will be complementary to our other investments in the infrastructure and power sectors, and we look forward to a long and fruitful working relationship with Chris Kruger and his team,” said Tiso executive chairman Nkunku Sowazi.
The transaction is effective as of the end of January, with the possibility of ACTowers receiving and additional payment from Tiso of up to R22.5-million if certain performance criteria are met for the financial years ending in February 2009 and 2010.
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