AEEI acquired the shares in BTSA in 2008. BT and Kilomix had then owned 70% and 30%, respectively, of the share capital of BTSA. Photo: Armand Hough. African News Agency (ANA)
African Equity Empowerment Investments (AEEI) said yesterday it had reached agreement on a dispute and would dispose of a 30% stake in BT Communications Services South Africa (BTSA) for R290 million.
Kilomix Investments, an AEEI subsidiary, had entered into a share repurchase agreement with BTSA, a subsidiary of the multinational BT Limited, in terms of which BTSA would acquire 30 000 shares, or 30% of the share capital of BTSA, owned by Kilomix, for R290m.
AEEI acquired the shares in BTSA in 2008. BT and Kilomix had then owned 70% and 30%, respectively, of the share capital of BTSA.
In terms of the shareholders agreement, BT had an option (BT Call Option) for it to purchase the BTSA shares held by Kilomix, upon certain events.
In 2021 a dispute arose between Kilomix and BT over the BT Call Option, a matter that had gone to arbitration.
AEEI’s board believed that, regardless of Kilomix’s prospects of success in the arbitration, the shareholder relationship with BT had broken down irretrievably, and being a minority shareholder, Kilomix would have minimal influence over BTSA going forward.
“Therefore, a decision was taken to preserve shareholder value by unlocking cash reserves for growth, and to limit further advisory and legal costs,” AEEI said in a statement yesterday.
BT, BTSA, Kilomix and AEEI agreed to settle the dispute. BTSA supports multi-national ICT outsourcing contracts and provides local data and voice outsourcing solutions, global frame and multiprotocol label switching services.
AEEI’s board said they had not yet decided on how the sale proceeds would be utilised.
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