JSE listed Allied Electronics Corporation Limited (Altron) announced today that its wholly owned subsidiary, Power Technologies Proprietary Limited (Powertech), has entered into an agreement whereby it will dispose of a controlling equity stake in its shareholding in Aberdare Cables and Aberdare International will dispose of 100% of its shareholding in Aberdare Europe comprising its Spanish and Portuguese operations to Hengtong Optic – Electric Co Limited (Hengtong) for approximately R1,232 billion in cash.
Listed on the Shanghai Stock Exchange, Hengtong is the fourth largest cable manufacturer in China and one of the largest cable manufacturers in the world. Hengtong’s scale and expertise makes it a strong strategic partner able to support Aberdare Group’s growth strategy through a process of technology innovation, product expansion, systems development and technical expertise.
Commenting on the announcement, Robert Venter, Chief Executive of Altron, said: “This is another positive step in the implementation of our strategy to identify committed equity partners best suited to support the needs and growth ambitions of our manufacturing businesses, an area of the group in which we have opted to reduce our exposure.”
Aberdare Cables will also have access to Hengtong’s vast operating experience and strong global balance sheet. In return, Aberdare Group offers an attractive platform for Hengtong to expand in South Africa, Africa and Europe.
“Altron is making good progress in reducing our exposure to certain manufacturing assets and using the proceeds to reduce the group’s overall debt as well as allowing the Group to focus and grow in the Information Technology and Telecommunication markets. We will continue to seek opportunities that support the creation of a smaller, but far more agile group that has high growth potential,” added Venter.