PWT powertel limited

Powertel.

  1. 4,330 Posts.
    RE: UBS Warburg - Reduce 3.59c
    key resistance 7.5 being met.(half of 15)
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    6.847097.75
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    In the financials released on the 13/3/2002---NTA is given as 13.96c
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    (NTA was 14.06c in the previous period) it showed a decrease in cash held from 34,052 to 16,486
    The high was 3.59---to retrace 82.5% makes it 62.825 x 82.5% equals 11.095625 x 38.2% equals 6.847097.75
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    If the entity is succesful in converting the loan they have into equity--then maybe that would mean less cash going out to service commitments.
    conversion at 14.5 cents per share.
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    A powerful force sizes up the broadband frontier
    By Natalie ApostolouMay 14 2002
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    As Telstra's market dominance continues to be scrutinised by the government, regulators and competitors, momentum is building in an ambitious project to construct a viable alternate national broadband infrastructure.
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    A groundswell of interest has emerged from a powerful group of Australia's electricity utilities, which are uniting in a bid to seize the potential synergies and opportunities in using their combined existing infrastructure as a platform for a residential and business broadband network.
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    UtilitiTel is the nascent concept, which was initially facilitated by telecommunications analyst Paul Budde. Budde, who has no financial stake in the project, has been working on the alliance since the middle of last year and has secured the interest of about 20 utilities.
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    The utilities involved include Western Power, Aurora Energy, Energy Australia, Citipower, Transgrid, Hydro Tasmania and Powercor Australia. However, complete details of the membership of the group remain confidential until its next meeting this month, when the findings of a study conducted by multi-utility expert Mary Egan, of Clear Advantage, will be discussed.
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    The group has drawn extensively on the experiences of other utility-based telecommunications carriers such as PowerTel, Uecomm, TransAct and Bright Telecommunications.
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    Budde says the project is not about the retail services over the network.
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    ''The network would be a true alternative to everybody who would like to offer services and content to homes and businesses," he says. ''By combining forces, the utilities could also increase their lobbying power."
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    Budde says as the Australian Competition and Consumer Commission is analysing the future of the pay TV industry, utilities are also concerned about developments in the pay TV market. As electricity companies also increasingly need interactive access to meter boxes to monitor energy use and improve efficient use of energy, he says, adding a last-mile broadband customer access network to it is an example of synergy.
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    ''Also, in relation to negotiating content with powerful media, entertainment and sport companies and organisations, a combined force makes sense."
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    The multi-utility concept is not new, with companies such as United States wholesale telecommunications provider Williams Communications and Britain's Norweb employing a variation on the theme. However, if this project does go ahead, it will be the first of its kind to employ such a scale geographically.
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    ''This is a long-term project if it comes off the ground," Budde says. ''We talk about a project that will affect the broadband infrastructure for our country for the next 20 years and more."
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    In Australia the multi-utility crossover has had varying degrees of success and failure.
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    ACTEW's telecommunications progeny TransACT, which also has backing from gas utility AGL, has been a successful example of the concept. However, funding problems in a difficult financial climate, and the reticence of Telstra to come to any content-sharing resolutions, have stifled its immediate success, but it remains a workable model that can be replicated in other regional cities.
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    United Energy's multi-million-dollar foray into the telecommunications sector with Uecomm has produced unspectacular results. Its last full-year results yielded a net operating loss before tax of $58.6 million with revenues of $33 million. The company groaned through 2001 with a series of profit warnings, and the slowdown of its broadband rollout plans.
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    PowerTel, backed by Williams and utility consortium DownTown utilities, is weathering the storm of a highly competitive corporate bandwidth market.
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    Meanwhile, in Western Australia, Western Power is committed to rolling out a wide-scale broadband infrastructure project branded Bright Telecommunications.
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    The utility, which has more than 810,000 customers, has teamed with vendor Alcatel to initially roll out a $5 million integrated voice, video and high-speed broadband network.
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    Western Power telecommunications manager Kevan Penter, a former Telstra executive, says his company has a vision for a very advanced broadband network in WA, ''but we'll get there step by step".
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    ''Broadband is a marathon, not a sprint, so to get effective broadband infrastructure we need companies who can go the distance," he says.
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    Financial modelling on the project reveals that the utility doesn't expect a return on investment for more than 10 years. But, says consultant Mary Egan, this is why utilities can make the cross-over into telecommunications with less struggle than an emerging telco.
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    ''They understand the management and construction of networks that stand the test of time," she says.
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    She adds that utilities also tend to be modest about their capabilities and ''they have a good long-range view".
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    This differs from many carriers' ambitions to get a quick return on investment. In terms of existing infrastructure, Egan says, several of these utilities have already used a great deal of fibre for the benefit of existing customers.
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    ''If all this fibre was fully interconnected it would be Australia's third-largest network," she says.
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    Porquoi5
    Suckered again-I said last night the post I wrote could be the silliest I had ever written-well read the AFR article
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    PowerTel debt default exposedMay 15
    Christine Lacy and Lisa Allen
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    State Government-backed telco PowerTel defaulted on key covenants relating to a $150 million debt facility, but failed to disclose the breach as a reason behind an emergency loan from its American parent and wider debt restructure.
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    PowerTel shareholders will vote at the end of this month on a $16 million loan from the Williams Communications Group, which has filed for Chapter 11 bankruptcy in the US. The breach is revealed in an independent experts' report by Deloitte Touche Tohmatsu on the issue of convertible rights to Williams in return for the $16 million loan.
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    It is also disclosed in PowerTel's annual report. Both reports were sent to shareholders in the past fortnight.
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    The December 31 breaches were a key catalyst for a wider restructuring of the group's debt funding, including a reduction in the $150 million facility to $100 million.
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    Along with Williams, which owns 35.1 per cent, PowerTel is controlled by a consortium of state power companies, DownTown Utilities, which has 35.1 per cent. Its shareholders are the NSW Government's EnergyAustralia; the Queensland Government's Energex and Melbourne's privatised CitiPower.
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    PowerTel - which lost $86.2 million in the past calendar year - told the market in March that the debt restructuring and fresh capital raising had been triggered by "reduced needs related to current and forecast revenues and capital expenditure". The market announcement made no reference to the covenant breach.
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    At that time, the company also said the "renegotiated bank loan and Williams Communications funding gives PowerTel a fully funded business plan". But the Deloitte report says financial losses might cause the group to seek more funding.
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    It says the group was forced to ask its parent for more money to provide comfort to its bankers because "there were limited sources of funding available" to the group due to its "recent financial performance, its position within the industry and the financial uncertainty regarding its major shareholder".
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    The report says the banks agreed to the new $100 million facility on the basis that Williams tipped in $16 million. PowerTel chief executive Stephen Butler said yesterday the facility was renegotiated in line with reduced revenue expectations.
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    He said the $16 million was to give comfort to the banks "as well as shareholders, that the company still had the support of Williams".
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    The report also says PowerTel is threatened by "a possible loss of support from key shareholders, investors and analysts; increased competition that may place pressure on operating margins; unplanned capital expenditure; and the dominant market position of Telstra". But PowerTel denies DownTown Utilities is a seller.
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    From the SMH today-Deloittes see it as a way of improving the capital raising prospects-as I read the article-conversion at 14.5 cents per share.
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    Williams moves to take over PowerTelBy Brian Robins
    May 15 2002
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    Troubled US telecommunications company Williams Communications is moving to take control of PowerTel, by seeking to convert a $16 million loan into equity.
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    Williams has a 35 per cent stake in PowerTel which will rise to 45 per cent if shareholders approve the conversion.
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    Assuming the full conversion of preference shares, Williams's stake in PowerTel would rise to 51 per cent.
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    Williams collapsed earlier this year, subsequently reaching agreement with creditors to cut its borrowings by $US6 billion.
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    The other large shareholder in PowerTel is Downtown Utilities, a joint venture of EnergyAustralia, Energex and Citipower.
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    Its existing 35 per cent stake in PowerTel - which matches the Williams stake - would be watered down to 30 per cent if the loan is converted.
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    After breaching revenue covenants, PowerTel needed to raise additional funds earlier this year. PowerTel subsequently revised its business plans and renegotiated its senior debt facility.
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    At that time, Williams lent PowerTel $16 million to boost working capital and meet PowerTel's obligations under some banking facilities.
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    In its annual report released late last month, PowerTel's auditors said there was ''inherent uncertainty" as to whether the revised business plan was achievable, and whether undrawn amounts under the finance facility with its banking syndicate would be accessible.
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    ''Given PowerTel's current level of debt funding, its recent financial performance and the outlook for participants in the telecommunications sector, it is possible PowerTel may need to seek additional funding in the future," Deloitte Touche Tohmatsu said in a review of the planned loan conversion.
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    ''Granting approval of the conversion rights will improve the ability of Williams Communications, as the major shareholder, to facilitate the process of future fundraising from alternative sources."
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    The conversion price is 14.55c a share, the weighted average of PowerTel's share price in February.
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    PowerTel shares closed at 7.1c yesterday.
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