New Tel's Chinese-themed swanky showdown in Sydney this week was no more than a AU$200 million capital raising pitch aimed at the local stockbroking market.
With less than 12 months under its belt as a contender in the international telecommunications scene, New Tel is making its move to build China's premier ISP and Chinese/English language portal, but needs AU$200 million to pave the way.
"We aim to become a global communications organisation through expansion of our network infrastructure, technical skills and key strategic alliances in China, Australia and USA," New Tel CEO Peter Malone, said.
A year ago, New Tel had no customers and no telecommunications income. Today, with near on 50,000 customers and AU$70 million in cash and liquid assets, "New Tel is in a sound and significant financial position to move forward," Malone said.
Internet services in China are just starting and it's said to be very much like the US and Australia was five-to-10 years ago, according to Malone. However the Chinese Internet industry is expected to develop far faster than it did in Australia and the US.
With a population of 1.2 billion and 16 million with Internet access, it is predicted that China will have 100 million people online by 2003.
"This is unheralded growth in any Western economy," Malone said.
To take advantage of the burgeoning Chinese market, New Tel will acquire two Chinese businesses - the Xinhua Internet Company for 120 million New Tel shares and Chinawold Internet Technologies for US$24 million, with the option of acquiring all shares in the Shenzhen Xinhua Network Technology Development Company.
With an existing 144 million share issue, New Tel needs to expand its capital base to acquire the businesses, and Malone seems confident of finding approximately AU$100 million from Australian shareholders and AU$100 million from an international interested parties.
"We've got a not of international following," Malone said.
The deal is subject to shareholder approval as well as regulatory approvals in Australia and China.
