Altron forms BEE trust with ICT education focus

Altron will form a new trust focused on funding ICT skills-related education as part of a new BEE transaction.

In a note to investors on Friday, the technology group said it believed the transaction provided a “unique opportunity” to be a catalyst for SA’s societal advancement and industry innovation.

“With these core values in mind, the transaction will be used to enhance the current employee value proposition by providing funding to qualifying employees’ relatives and other stakeholders within the Altron ecosystem, giving them access to information and communication technology related education opportunities to address the increasing scarcity of ICT skills in SA.”

Altron TMT Holdings, a wholly owned subsidiary, is the founder of the trust called Ascent, the trustee composition of which will be at least 50% independent, at least 50% black, and at least 25% black women.

The chair will be independent and will not have a casting vote, while eligibility will be determined with reference to a household income of less than R600,000 per annum. 

To make this happen:

• Ascent will obtain a 20% interest through its subsidiary Altron Foundation (Foundation Holdings), in a new entity, Altron SA Holdings (HoldCo), which will hold 100% of Altron TMT SA. This means Foundation Holdings will indirectly hold a 20% interest in Altron TMT SA.
• Altron TMT Holdings will hold the remaining 80% in HoldCo and its subsidiaries.
• Altron TMT Holdings, being the sole shareholder of Altron TMT SA, will dispose of its shares in TMT SA to HoldCo in exchange for cumulative, non-participating, redeemable preference shares in HoldCo, equal to the full market value of TMT SA.
• The intragroup transaction will enable Foundation Holdings to acquire HoldCo ordinary shares, the broad-based BEE subscription at nominal value and without the need to raise acquisition funding and provide it with immediate ownership in HoldCo and indirectly all the assets and subsidiaries of HoldCo.

The preference shares will carry a return above the official prime lending rate. 

The current five-year option value of the transaction is about R21m. “This will however be eliminated on consolidation in Altron’s annual financial statements,” the group said, adding that the trust’s founder will provide an initial R5m towards the transaction in the 2025 financial year.

The company said the transaction did not require shareholder approval, and that the trust was not deemed a related party, with the transaction expected to be completed no later than July 31. 

Werner Kapp, Altron’s group CEO, said: “As SA’s original technology brand, we’re passionate about solving real-world problems, from the everyday to the epic. Businesses like ours can help tackle the very real problem of rising youth unemployment by bridging the skills gap and empowering young people for future jobs.”

gavazam@businesslive.co.za