Carrier After $25m To Fund Network
Sydney Morning Herald
Friday July 28, 2000
Data carrier FlowCom plans to raise $25 million in a sharemarket float to finance the roll-out of its high-speed eastern seaboard network using DSL (digital subscriber line) technology.
FlowCom, which started in 1998, plans to sell 50 million share at 50c each, representing about 25 per cent of the business, with one free option attached to every four shares issued at an exercise price of 62.5c.
Based on the issue price, FlowCom will have a sharemarket value of $101 million. The offer opens next Tuesday and closes on August 21, with an ASX listing scheduled for September 6.
FlowCom chief executive officer Mr Tom Amos said most of the funds raised would finance the $53.4 million rollout of its DSL network, and complete the Sydney-Brisbane link of its microwave network.
Mr Amos, a principal of telecom consultant Amos Aked Swift, said FlowCom's business plan was based on access to Telstra's public switch telephone network through the so-called unbundling of the local loop, which starts next month.
``We are in the data communications market. We are not in the residential market, although we will sell to individual high users," Mr Amos said. Telstra, Cable & Wireless Optus and Netcomm have stated they will target the corporate market.
FlowCom forecasts a net loss of $5.03 million in the year to June 2000 on sales of $5.9 million, turning to a net profit of $429,000 in 2000-01 on sales of $49.3 million.
Mr Amos, together with business associates, own 72.8 per cent of FlowCom, which will be diluted to 50.5 per cent once the new shares are issued, while FlowCom management owns a further 15.4 per cent, which will decrease to 10.7 per cent.
FlowCom has also granted an option to Japanese trading house Nissho Iwai Corp for 8 million new shares in exchange for the cancellation of a secured mortgage Nissho holds over Macrocom shares.
© 2000 Sydney Morning Herald