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New Tel to Launch Global Internet Service for China
HERDSMAN, Australia, Nov. 23 /PRNewswire/ -- New Tel Ltd. (Nasdaq: NWLL) has entered into agreements with Xinhua Holdings Limited to establish an internet service and a Chinese/English language portal for China.
New Tel CEO Peter Malone also said the Company plans to expand its telecommunications carrier operations in Australia to provide Internet as well as telephony services.
"The Internet business in China is part of the Company's overall strategy to provide a range of value-added products and services for existing customers."
Mr. Malone added: "New Tel and Xinhua intend to work in partnership with a number of government owned enterprises in China to accelerate the uptake of Internet access in China. The ISP business will leverage from existing ISPs, with strategic alliances with infrastructure providers providing the opportunity to reach a large portion of the Internet access market.
"The portal business will be closely linked to the ISP business. New Tel plans to provide access to a broad range of Chinese content through its partnership with Xinhua and a number of China's most heavily visited websites that focus on information collection and dissemination across a range of industries."
Principal Terms of Agreements
Under the New Tel-Xinhua agreements, Xinhua will form a new company to become the owner of a number of Internet and related interests in China ("Newco"). Newco will be acquired by New Tel by way of the issue to Xinhua of 200 million New Tel shares at A$2.00 per share (i.e. Total value of A$400 million).
Mr. Malone said that as part of this process, New Tel has provided Xinhua with $1.0 million as a deposit, funded by the issue of an A$2.7 million convertible note. The Company intends to raise a further A$20 million by way of a rights issue at A$1.20 per share to fund the working capital requirements of this transaction.
"Of the A$20 million total, New Tel has completed a placement of 4.2 million shares, raising A$5 million," Mr.Malone said. "The Company will then, subject to shareholder approval, undertake a further placement to raise A$10 million in conjunction with a rights issue at A$1.20 per share in order to raise an additional A$5 million.
"After formal due diligence is completed and with the approval of shareholders, New Tel will then seek to raise a further A$200 million on The Nasdaq Stock Market in the USA to fund the development of the business. It is proposed that the equity placement will involve 100 million shares at A$2.00 per share."
New Tel Limited is a rapidly growing Australian telecommunications company listed on the Australian and Nasdaq stock exchanges. New Tel launched operations July 1, 1999, providing national and international telephony and data services with emphasis on serving Asia, particularly China.
SOURCE New Tel Ltd.
CO: New Tel Ltd.; Xinhua Holdings Limited
ST: Australia, China
IN: TLS
SU: PDT
11/23/1999 12:14 EST prnewswire.com |
