Keep an eye out on SINC, Southland Financial, Inc. Hearing news out soon, with more deals in the works. Once all is said and done, SINC should be a major player in the telecom industry... the following is their June 99 Investment Overview... take a look at their management. Seems like a real company to me, with a real future.
www.sincsfi.com
JUNE 1999
COMMERCIAL-IN-CONFIDENCE
Southland Financial, Inc.
OTC BB: SINC
Investment Overview
The information contained here-in has been prepared by sources deemed reliable. No representation or warranty is made however, as to the accuracy or completeness of such information, and nothing contained here-in is, or shall be relied on as a promise or representation of the future.
1. OVERVIEW
The economic progress and prosperity of Hong Kong has long been underpinned by an efficient and cost-effective telecommunications sector. With an economic downturn in the region, the need for continuing micro-economic reform and telecom liberalisation will prove to be essential for the Special Administrative Region, (SAR) of Hong Kong, to maintain its role as a financial services and business centre.
While the mobile telecom market in Hong Kong is highly competitive, the three new local fixed line carriers, (Hutchison, New T&T and New World) have only made slight inroads into Hong Kong Telecom's local market share. After three years in business, the three new carriers have managed only 50,000 local access lines off Hong Kong Telecom's 3 million line base.
The Hong Kong government has recently released its proposed broadcasting and telecommunications liberalisation policies which are presented as a micro-economic reform designed to reduce prices and increase innovation, and as an industry development policy aimed at attracting regional hubbing business.
2. BUSINESS STRATEGY
The strategic objective of Southland Financial, Inc., (SFI) and its subsidiary, United Telecom International Ltd., (UTI) is to become a carrier's carrier in the provision of the Customer Access Network, (CAN) services.
The business strategy is based on the following worldwide developments:
· The continuing viability and growth of telecom carriers will increasingly be dependent on having direct access and thus relationship with consumers.
· This direct access will enable carriers to provide integrated telecom services to customers and these services include telephony, Pay TV, fast Internet access and other interactive services.
· The demand for high quality transmission capacity that is required to handle complex voice, data and video telecommunications, will continue to increase and will require higher bandwidth digital optical fibre networks.
The principle elements of the company's business strategy include the following:
· The company intends to invest and build a highly reliable and versatile telecommunications network in Hong Kong that will provide local access to the homes and offices of customers.
· Carriers in Hong Kong will lease transmission capacity and lines from the company as the demand is required on a “pay as you use” principle.
· The company will build the infrastructure in partnership with the carriers who are the direct customers to the company, adopting a “just in time” format.
· Carriers themselves do not have to invest in building infrastructures thus saving on capital investments. The carriers can focus on what they do best to develop new products and services to meet market demand. There is therefore little duplication of infrastructures and waste of scarce resources.
3. STRATEGIC PARTNERSHIPS
To ensure the viability of the project, SFI/UTI has undertaken a significant amount of work in Hong Kong to establish strategic relationships with the carriers and the government regulator, OFTA. Furthermore, SFI/UTI has recently finalised a contract with Top Express Engineering Limited and Welcome Engineering Company Limited to acquire 300M USD of existing and new fiber optic network infrastructure, over the next four years.
4. THE NETWORK
The company plans to construct and operate state of the art, competitive local telecommunications networks employing the latest SDH transmission technology with dual ring architectures and centralised network management and maintenance. Please refer to Attachment “A.”
The company's advanced networks will, through other carriers, offer cost effective access to residential subscribers and provide uniform, high reliable quality services to large corporate customers.
The company's network configuration is shown in the attachment and consists of the following key elements:
· Interface to the carriers
The electronics that interface to the carriers' exchange equipment.
· Ducting and optical fibres
The optical fibre rings, along with the cables in ducts, running between exchanges, providing for robust and self-healing networks.
· Electronic equipment
The transmission equipment and the necessary electronics required to terminate the traffic at the buildings.
· Block-wiring
These are the horizontal and vertical cablings within buildings leading to the subscribers' terminating blocks.
· Network management
The computer systems that provide centralised monitoring of the network. The aim is to minimise network down-time thereby providing a highly reliable and competitive service.
4. CAPITAL REQUIREMENT
SFI will require a total capital raise of 500M USD, over the next 4 year period, to fully deploy its carrier's carrier network. SFI is presently seeking to finalise 50M USD required for the 1999/2000 financial year. SFI recently announced a funding Agreement with Delta Bay Group Limited, (BVI) for a minimum of 17.5M USD over the next twelve months. The funds raised will be utilised to acquire existing strategic ducting, to build complimentary infrastructure and for operational and organisational establishment requirements.
5. FINANCIAL & MARKET PROJECTIONS
The following Financial projections provide an overview of the expected market share gain, revenue and EBIT given the capital requirements are met on a timely and consistent basis. Please refer to Attachment “A” for a graphical representation.
June 2000 June 2001 June 2002 June 2003 June 2004 June 2005 June 2006
Capital InvestedM USD 50 160 161 115 N/A N/A N/A
ProjectedRevenueM USD 10 34 67 102 144 183 218
ProjectedEBITM USD 1.8 5.8 12.1 23 54.26 88.6 117.8
ProjectedMarketShare % 2 8 15 22 29 34 38
6. MANAGEMENT
Commensurate of a project of this magnitude, Southland will continue to develop and enhance its senior management team. The current Board and Senior Management members are seasoned, experienced professionals who have all gained distinction in their chosen fields of banking, media and communications, law, corporate governance and telecommunications.
David A. Turik, President and Chairman of the Board
Mr Turik brings a wealth of telecommunications expertise to the Company having previously held senior executive management positions with Australian publicly listed companies, NetComm Australia, Telstra, (the former national carrier, Telecom Australia), AAP Telecommunications and Spectrum Network Systems, as well as Toronto Stock Exchange listed, TSB International. In the past 5 years, he has predominantly focussed on Business Development, Mergers and Acquisitions and project specific capital raisings. Mr Turik has held an interim role of acting President and Chairman for the Company and was responsible for identifying and negotiating the Company's telecommunications infrastructure based project in Hong Kong. Mr Turik has held many private board appointments across a wide range of telecommunications related organisations.
Martin Dougherty, Non Executive Director
Mr Dougherty has had a long and distinguished career in the media and communications field having held senior executive positions with both the John Fairfax Group and News Limited. Mr Dougherty has also held Board Directorships with the John Fairfax Group, the Australian Associated Press, (AAP) and David Syme Pty Ltd, (publishers of the Melbourne Age and Business Review Weekly). For over 17 years, Mr Dougherty has also been Chairman of Dougherty Communications; public affairs consultants, specialising in strategic public relations, issues management, telecommunications, Government and media relations. This company became a member of the Ogilvy Public Relations Group. Mr Dougherty was a member of the International Management Group of Olgilvy Public Relations during the 1980's. He resumed private practise as a consultant in1989.
Willie Lo, Executive Director, Chairman of United Telecom Inc, (Hong Kong)
Mr Willie Lo is a veteran of the Telecommunications and Information Technology industries. He has held senior technical management positions for over 18 years, with Hong Kong Telecom, Telstra, (Telecom Australia) and PRACOM Pty Ltd. Mr Lo has successfully managed a broad range of projects from cable network roll-outs to systems development and implementation. For 8 years, Mr Lo was a Project Manager for Hong Kong Telecom, managing the deployment of major cable networks. Mr Lo was the IT Manager, Media & Broadcasting, for Telstra, prior to becoming IT Manager for PRACOM and an Executive Director, for Pacific Communications Research P/L.
Mr Lo holds a Masters Degree in Systems Engineering, (RMIT), Diploma in Business Studies, Hong Kong Polytechnic and Bachelor of Applied Sciences, University of Melbourne.
Robert Talbot-Stern, Non Executive Director
Mr Talbot-Stern, B.S. Econ. (Wharton), J.D. (Penn.), LL.M. (London), has had a distinguished corporate, academic and public career, having been Group Counsel for UNISYS and Assistant General Counsel for Chrysler. While at Chrysler Talbot-Stern held Board directorships with Mitsubishi Motors and Peugeot, while coordinating Chrysler Canada's rescue effort. Mr Talbot-Stern is on a current White House Task Force on Deregulation and Competition, has been a guest columnist for the Australian Financial Review and business commentator for CNBC-TV. He has worked as a Management and Legal consultant in affiliation with consulting and law firms in Washington (National Academy of Sciences, McKinsey & Co., Herzfeld & Rubin, and Boston Consulting Group). He has been a past adviser to the Business Roundtable and Federal Reserve Board on interest rates.
Southland Financial, Inc.
OTC BB: SINC www.sincsfi.com
Company Information
(as of 05 June 1999)
PRESIDENT & CHAIRMAN: David A. Turik Tel: +61 410 59 8885
63 Cromer Road, Fax: +61 2 9982-5348
Cromer Heights, NSW Email: dat@mpx.com.au
Australia
SECRETARY/TREASURER: Alexander (Sandy) Anderson, Tel: +1 604) 469-6957
16-1 Aspenwood Drive, Fax: +1 604) 469-6937
Port Moody, BC
Canada
DIRECTORS: Alexander Anderson
Martin Dougherty
Robert Hogarth
Willie Lo
Robert Talbot-Stern
David A. Turik
CORPORATE ATTORNEY: (US) Robert C. Laskowski Tel: +1 503) 241-0780
Attorney at Law Fax: +1 503) 226-6278
1001- S.W. Fifth Avenue
Portland, Oregon
CORPORATE ATTORNEY: (HK) Antony Corel Tel: +852 2103-0302
Of Law Fax: +852 2509-9772
Squire, Sanders & Dempsey
Hong Kong
SECURITIES COUNSEL: Herman G. Herbig Tel: +1 702) 782-4003
1638 Esmeralda Avenue
Minden, Nevada
ACCOUNTANTS: (US) J. Paul Kenote Tel: 1 503) 241-2977
1618 S.W. First Avenue
Portland, Oregon
ACCOUNTANTS: (HK) Mumtaz Ahmed Tel: +852 2852-5859
Practice Director, Fax: +852 2850-6012
Telecom & Media
Deloitte & Touche
Hong Kong
AGENTS: Roxanne J. Paine Tel: +1 775) 246-3030
Resident Agent
Dayton, Nevada
Ryan Bernard Tel: +1 503) 641-8337
Executive Business
Beaverton, Oregon
Robert Palkowski Tel: +1 604) 331-4422 Barrister & Solicitor
Vancouver, BC
INVESTOR RELATIONS: Mr. Victor Webb,
President
Marston Webb International
60 Madison Avenue,
New York, New York
Investor Relations,
Victor Webb, Tel: +1 212 684-6627
Shareholder Liaison,
Peter Matusik, Tel: +1 877 330-3321
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