Hi Don,
I thought I'd stop by with another idea (the last one was AMZN at about presplit 55 several months ago). I was wondering what your take is on the opportunity for telecom growth potential in sub-Saharan Africa.
Electric & Gas Technology, Inc. Enters Telecommunication Market with Acquisition of AfriTel
DALLAS, June 11 /PRNewswire/ -- Electric & Gas Technology, Inc. (Nasdaq: ELGT) announced today it has executed an agreement for a major acquisition in the telecommunication industry. The company has agreed to acquire 100% of the outstanding shares of African Telecommunication, Inc. (AfriTel). ELGT will initially issue 4.5 million shares of common stock, subject to shareholders' approval, and a three-year program of additional stock based on certain sales milestones. Target revenues for additional stock are annual revenues of $25 million in 1999, $50 million in 2000 and $80 million in 2001.
AfriTel has represented that it has approximately $10 million in assets, with shareholders' equity of about $6.5 million and convertible debt of about $3.5 million. ELGT felt this was a better acquisition for shareholder value than the Cosmos/Gateway deal they have been pursuing. With a valuable license for installation and operation of a wireless cellular telephone system in the Democratic Republic of Congo and a wireless data license for Ghana, AfriTel provides ELGT with an immediate entry into the lucrative African market.
Qualcomm, Inc. (Nasdaq: QCOM) will supply $70 million worth of terminal units and infrastructure based on PCS/CDMA Technology. AfriTel stated that Qualcomm has signed a Letter of Intent to provide equipment financing for this contract.
Electric & Gas Technology, Inc. was formed in 1985 to serve as a holding company for operating subsidiary corporations. These subsidiaries operate in three distinct business segments: water products, natural gas equipment and electrical equipment/meter enclosures. The company is dedicated to internal growth related to its atmospheric water technology in addition to growth through acquisition.
This material was prepared by The Hawke Group, Inc. ("Hawke") for the company discussed herein based upon company-supplied information or other sources believed to be reliable. The information is not guaranteed by Hawke for accuracy or to be a11 inclusive. Forward-looking statements in this release are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties and actual results could differ from those discussed. This material is information only and is not an offer or solicitation to buy or sell the securities. Hawke, its affiliates, and/or its officers, directors and employees may from time to time have a position in these securities.
SOURCE Electric & Gas Technology, Inc.
CO: Electric & Gas Technology, Inc.; African Telecommunications, Inc.; Qualcomm Inc.
ST: Texas, Democratic Republic of Congo, Ghana
****************************************************************
Excerpts From Interview With CEO of AfriTel On Acquisition by Electric & Gas Technologies, Inc.
DALLAS, June 17 /PRNewswire/ -- The following information is submitted by Mr. Roger Blott, CEO of AfriTel from an interview on the merger of AfriTel with Electric & Gas Technology, Inc. (Nasdaq: ELGT).
Q: Why was AfriTel acquired by ELGT?
A: ELGT saw the AfriTel opportunity as one that could satisfy its ambitions to bring increased value to shareholders and to diversify into telecommunications.
Q: What is the benefit to AfriTel?
A: ELGT is a Nasdaq-traded company with an appetite to invest in telecommunications in high-growth areas, and AfriTel needs investments, so there is a natural fit. AfriTel is ambitious in its plans to grow and grow into this sector.
Q: Who will run AfriTel?
A: AfriTel will have its own board and management consisting of experienced professionals.
Q: Why is AfriTel investing in Africa, and why in the Congo?
A: Sub-Saharan Africa represents one of the last untapped markets for telecommunications in the world. Penetration of telephone lines is below 1% in most countries. The existing operators typically offer poor service and enjoy high margins. There are opportunities to acquire concessions and develop fast-return businesses.
Q: What licenses does AfriTel have?
A: In the Congo we have a license to operate a wireless local loop system -- fixed phones connected to wireless technology. The system is very similar to mobile cellular. The technology we are going to use is the PCS/CDMA standard which is identical to the PCS/spectrum that was used in the USA in 1996-1997.
Q: What are AfriTel's plans for the future?
A: Our main priority is to get the Congo up and running. Meantime, we are also looking at potential acquisitions and new licenses in central and west Africa. Our goal is to be operational in at least seven countries by the end of 1999.
Q: What is the nature of the Qualcomm deal?
A: Qualcomm has entered into a supply contract with AfriTel for up to $70m of infrastructure and handsets. The contract is such that the equipment is deployed in modules, with the first one going into the Congo immediately. The others may be deployed in the Congo or elsewhere the AfriTel has an appropriate concession. Qualcomm has effectively entered into a supplier partnership with AfriTel.
The infrastructure is to be substantially financed by Qualcomm, and the financing agreement is in the process of completion. The terms are extremely competitive and reflect Qualcomm's confidence in AfriTel as a project.
This material was prepared by the Hawke Group, Inc. ("Hawke") for the Company discussed herein, based upon company-supplied information or other sources believed to be reliable. The information is not guaranteed by Hawke for accuracy or to be all inclusive. Forward-looking statements in this release are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties and actual results could differ from those discussed. This material is information only and is not an offer or solicitation to buy or sell the securities. Hawke, its affiliates, and/or its officers, directors and employees may from time to time have a position in these securities.
SOURCE Electric & Gas Technology, Inc.
CO: Electric & Gas Technology, Inc.; AfriTel; Qualcomm
ST: Texas
TIA,
Doug R |
