NWLL on the MOVE UP AGAIN... New Tel Clarifies Relationship with Xinhua; Provides Internet Project Update...
HERDSMAN, Western Australia, Jan. 18 /PRNewswire/ -- New Tel Ltd.
(Nasdaq: NWLL) today provided an update on the progress of it's development of
China's leading Internet Service Provider (ISP) and Portal.
In addition, the Company confirmed the direct relationship between Xinhua
Holdings Company and Xinhua News Agency, clarifying any misunderstanding in
the market. Chief Executive Officer Peter Malone said "Xinhua has also
advised New Tel that it is satisfied with the progress of the Internet
project, and with the solid relationship developed with New Tel on the
Internet project and over the past three years in winning an Australian
telecommunications carrier licence and commencing carrier operations."
As contemplated in New Tel's agreement signed with Xinhua on 23 November
1999, a Project Team has been formed for the purpose of implementing the
proposed Internet transaction and associated capital raising. The Project
Team is made up of New Tel and Xinhua executives and experts from US and UK
lawyers Brown & Wood, Freehill Hollingdale & Page, and Deloitte Touche
Tohmatsu (E-commerce group). This Team has been mandated to manage all
aspects of the transaction including financing, due diligence and the e-
commerce strategy development and roll-out.
The Project Team has completed a detailed assessment of Internet products
and services. Elements of the products and services assessed include an
identification of those offered, customer segments and profiles, and
performance reports such as page impressions and hit rates where available to
assess the current levels of activity of these products and services.
The Project Team, operating from the Company's Shenzhen office, has
identified all information requirements concerning the Internet related assets
being acquired. Xinhua is now finalising the information which will be
utilised to complete the e-commerce strategy prior to the main capital raising
and roll-out of the programme, including:
-- Identification and analysis of target markets and customer segments for
New Tel;
-- Definition of the organisational linkages and boundaries with New Tel
Limited and partners;
-- Human resources requirements;
-- Technology environment design;
-- Financial planning and cashflow requirements; and
-- Operations environment implementation.
New Tel advised that further to an announcement to ASX on 23 November
1999, the company has raised A$17.2m to fund the initial stage of the Internet
Project. New Tel shareholders are also being offered the opportunity to
participate in a non-renounceable rights issue of $4.8m through a short form
prospectus to be issued this month. It is planned that shareholders will be
offered one ordinary share for every 25 ordinary fully paid shares held at an
issue price of $1.20 per new share.
"The Company will then proceed to the second major stage which involves a
capital raising of A$200m to finance the rollout of the Internet programme,"
added Mr. Malone.
As part of this programme, with the capital of the Company to increase
substantially further to the completion of the acquisition of the Internet
assets and the capital raising of A$200 million, the Company proposes to issue
options to Peter Malone. This issue, equating to up to 20 per cent of the
issued capital of the Company, is provided for his efforts in securing and
delivering the project to the Company and his ongoing commitment under his
employment contract.
The exercise of these options will be based upon the achievement of key
performance milestones. Additional to the completion of the A$200m capital
raising and the acquisition of the Chinese Internet assets, these milestones
include the achievement of set revenue targets or minimum share market
capitalisation targets. Based on the prevailing market capitalisation and
share price, it is envisaged that these options will be issued at A$4.00 with
vesting to be benchmarked between A$4.00 and A$6.00.
"We are pleased to report the progress of our Internet Project and the
strength of our ongoing relationship with Xinhua. Shareholders will be
provided with an Information Memorandum covering the ISP and Portal business
and the issue of options presently," said Mr. Malone.
New Tel has continued its rise on ASX over the past week closing today at
A$2.94.
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 and provides local, national, international and mobile
telephony and data services with emphasis on serving Asia, particularly China.
SOURCE New Tel Ltd.
-0- 01/18/2000
/CONTACT: Peter Malone of New Tel Limited, 618-9244-1166; or Ayelet
Shaked of The Anne McBride Co., 212-983-1702/
(NWLL)
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