Altron - judgement announcement

The Board informed shareholders that judgement was handed down in the Gauteng High Court in Pretoria relating to the application brought by the City of Tshwane ("CoT") to review and set aside the tender and award of the Altron Nexus / CoT Municipal Broadband Network contract. The contract was awarded to a special purpose vehicle ("SPV") in June 2015, in which Altron Nexus is involved as the primary network designer and architect, supplier of broadband equipment and related services, as well as being a minority shareholder of the SPV.

The matter relates to a dispute between the SPV and CoT over the latter's allegations that the tender award process was unlawful due to the internal processes and procedure at the CoT not having been followed correctly. Subsequent to being awarded, the project was put on hold by CoT, pending the outcome of the court case. The Court's decision on 16 July 2019 was to set aside the awarding of the contract on the basis of internal processes not having been followed by the CoT in the awarding of the tender; in the decision of the Municipal Council to approve the terms and sign-off of the Build Operate and Transfer ("BOT") agreement entered into between CoT and the SPV; and the waiver by CoT of the fulfilment of suspensive conditions precedent relating to the BOT agreement.

Altron Nexus has assessed the status of this matter and reasonably estimates the exposure of the business to amount to between R40 million and R60 million. This takes into account provisions taken against its claim against the SPV due to the uncertainties with regard to the legal challenge brought by CoT and the options available, including repossession and redeployment of equipment supplied to date.

Altron is in the process of studying the judgement and its legal rights and will engage with the SPV, project funders and CoT and consider the next steps to take with regard to this matter, at which point the company will provide shareholders with an updated disclosure.

2019-07-17 08:10:24