NWL-Trading halt lifted

  1. 153 Posts.
    New Tel Limited is pleased to announce that it has entered into a
    formal Share Purchase Agreement for the acquisition of all the issued
    share capital in Digiplus Investments Limited and associated
    companies in Australia and New Zealand (Digiplus), further to a
    release to the market on 15 March 2002.

    The purchase consideration for Digiplus is $40 million in cash and
    $10 million in ordinary shares in New Tel, subject to certain
    adjustments and related indemnities. An initial cash component of
    $11.5 million will be financed from a placement, with the remaining
    $28.5 million to be paid in three tranches over a 15 month period and
    proposed to be funded from ongoing cashflow generated by the Digiplus

    Completion of the Digiplus acquisition will consolidate New Tel's
    position as a major telecommunications carrier, fast tracking growth
    and strengthening the Company's presence in Asia Pacific. As a result
    of this transaction New Tel expects to double its customer base to
    around 300,000 and increase revenues to approximately $250 million
    per annum.

    Digiplus is a reseller established in Australia in 1997 offering
    competitive local, national, international, mobile calls and internet
    services. The Digiplus business has a strong strategic fit with New
    Tel with both companies providing innovative products and services
    specifically targeted at migrant communities. In addition the
    acquisition opens up opportunities to provide further services to New
    Tel's other target market niches of community, cultural and sporting

    The acquisition of Digiplus will provide solid opportunities for New
    Tel both in taking advantage of the synergies between the two
    businesses and in providing access to additional cash flow from the
    Digiplus business. Over the past 6 months, the Digiplus operation has
    generated revenues in excess of $48 million with a cash flow surplus
    of around A$1.5 million per month. As part of the acquisition, New
    Tel will contract existing Digiplus management executives to continue
    running the Digiplus operation.

    New Tel anticipates further savings in the Digiplus operation through
    its access to services at the wholesale rates applicable to carriers.
    In addition, New Tel plans to add value by cross selling its own
    suite of products and services to Digiplus customers, leveraging
    economies of scale across the Company and reducing total customer
    acquisition costs.

    The completion of the acquisition is subject to a number of
    conditions including obtaining New Tel shareholder approval,
    completion of the placement of shares to raise $13 million (as
    announced on 15 March 2002), FIRB and OIC approvals, the satisfaction
    of certain other conditions relating to ongoing arrangements with
    Digiplus' suppliers and financiers, and entry by New Tel into new
    mobile telephony resale arrangements with Optus.

    In addition, New Tel will undertake further due diligence in relation
    to Digiplus' New Zealand subsidiaries, prior to determining whether
    to proceed with the acquisition
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