Altron, the owner of vehicle tracking platform Netstar, is taking the City of Tshwane to one of the highest courts in the land over the loss of a contract worth more than a tenth of its value on the JSE.

The technology company said on Thursday that Thobela Telecoms, in which it is a minority shareholder through its Altron Nexus subsidiary, had been granted leave to appeal against a July court judgment that set aside the City of Tshwane's R1.2bn municipal broadband contract.

Thobela had been granted leave to appeal directly to the Supreme Court of Appeal, and shareholders would be advised regarding the outcome, Altron said in a statement.

Altron's head of communications, Chris Kabwato, said: “Altron Nexus was one of three applicants who applied for leave to appeal against the judgment handed down by the Pretoria high court on July 16 2019.  

As the case is under judicial consideration, Altron declined to comment on what its exact stake is in Thobela Telecoms and what it would be entitled to in the deal.

The high court in Pretoria set aside the contract, which was awarded in 2015 to Thobela Telecoms. Thobela is a special-purpose vehicle. Altron was involved as a primary network designer and architect, as well as a supplier of broadband equipment and related services.

After the contract was awarded, the city said the tender process was unlawful because its own internal processes and procedures were not correctly followed. The city later put the project on hold pending the outcome of the case.

“Leave to appeal was granted on the basis that there is reasonable prospect of another court coming to a different decision, having regard to the facts and the applicable legal principles in the matter,” Kabwato said.

No dates have been set as to when the next court appearance will take place.  

Altron has said previously it had completed about 40% of the project before funding was stopped. It was owed R270m, but only expected to recover about R200m. Altron currently has contracts to build similar networks in Gauteng, Limpopo and Cape Town.

The company's share price closed 4.17% higher on Thursday at R25.

The City of Tshwane could not be reached for comment.