South Africa: Intel arm invests $5m in Altech
Intel Capital on Thursday announced it has reached an agreement to invest US$5m in JSE-listed technology group Altech. It is the first investment in SA by Intel Capital, the investment arm of US semiconductor giant Intel.
The agreement, which remains subject to Altech shareholder approval, is intended to allow both Altech and Intel to explore possible areas of collaboration and to accelerate the adoption of broadband services in Africa.
Altech CEO Craig Venter says the investment is evidence of new market opportunities that are emerging as large-scale broadband communications infrastructure becomes available in SA, 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,” says Venter.
Arvind Sodhani, president of Intel Capital, says the company wants to stimulate economic activity in Africa. “We are actively seeking additional opportunities to invest in technology companies in emerging nations”.
Subject to the approval of Altech’s shareholders, Intel Capital will invest a convertible loan amount of $5m. The loan will be convertible into Altech ordinary shares at any time between the first and third anniversaries of the effective date of the transaction.
The conversion price will be determined upfront and will be based on Altech’s volume-weighted average price 30 days prior to the effective date of the transaction, plus a premium of 5%.