New Tel sells Engine asset

  1. 1,646 Posts.
    NEW TEL LIMITED 2002-08-20 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    NEW TEL DIVESTS NON-CORE ASSET TO FOCUS ON BUILDING
    TELECOMMUNICATIONS CARRIER

    New Tel Limited advises that it is selling its major non-core asset
    and has restructured business operations as part of a strategic
    programme to position the Company amongst the leading
    telecommunications carriers in Asia Pacific.

    The Company has entered into a Heads of Agreement to sell its 67.35%
    investment in engine systems developer Advanced Engine Components
    Limited to Global Business Solutions Limited, a public listed company
    on ASX with a number of investments in listed and unlisted companies.
    The purchase consideration is $11 million with $0.05 to be paid for
    every AEC ordinary share held by New Tel for a total of $5.5 million;
    $1.5 million cash for assignment of AEC's debt to New Tel; and the
    issue of convertible notes to raise a further $4 million. The
    agreement is subject to the satisfaction of certain conditions
    including due diligence by GBS.

    The proceeds from the sale of this asset will provide ongoing working
    capital for the New Tel telecommunications business.

    In conjunction with the above programme, New Tel has implemented a
    new operational structure to focus the Company's activities on
    telecommunications and media technology. Australian operations will
    be based out of North Sydney, including the national Network
    Operations Centre that runs the Company's high tech switch facilities
    and IT hub. National marketing, sales and administrative functions
    will be managed through this office, with small functional units also
    located in each capital city.

    The Company has appointed new executives for the operations including
    Mr Trevor Harris, Head of Operations, who was previously the Director
    of Strategic Technology and Director of Operations and Engineering at
    AAPT. Mr Steve Parks, ex Chief Financial Officer (CFO) at the
    Strathfield Group has been appointed CFO and Mr George Savva, also
    from Strathfield Group as Group General Manager for Sales and
    Marketing, is the new Head of Marketing and Sales.

    New Tel's Corporate office will be based in Perth, Western Australia
    and focus on group corporate programmes in Asia Pacific including
    strategic planning, capital raisings, acquisitions and regulatory
    matters relating to the Company's listing on ASX and Nasdaq.

    The Company will now focus on building New Tel as a leading
    telecommunications and media technology company in Asia Pacific. As
    part of that programme, shareholders will vote later this week on the
    acquisition of Digiplus that will see New Tel's revenues increase to
    around $250 million per annum.

    Over the past six months New Tel has been heavily involved in the
    completion of the Cable & Telecoms acquisition and in recent times
    the completion of all documentation for the Digiplus acquisition. As
    part of this external activity, the Company is in the process of
    finalising its independent review for the half year ended 31 December
    2001.

    The Company is comfortable with the cash flow programme involving the
    funding of Digiplus and acknowledges that Digiplus is currently
    providing in excess of $1.4 million/month EBITDA. Based on the
    current programme over 15 months this equates to $21 million which
    will be utilized for part payment to the Digiplus vendors. The
    balance of the cash portion of the purchase consideration is being
    provided through a capital raising of $15 million.


    P Malone
    CHIEF EXECUTIVE OFFICER
 
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