PrimeTel is to proceed with its Initial Public Offering (IPO) with a view to list in the Alternative Market of the Cyprus Stock Exchange with the cash to be raised from the issue to be used to finance the Group’s expansion drive.
The IPO of Cyprus’ alternative telecommunications provider is to commence on June 9 and run until June 18 with the company offering a total of 15.1 mln shares. According to the Company’s Prospectus, a total of 4 mln shares will be offered to subscribers, 7.5 mln to professional investors and select group of people and 2.85 mln to the public.
The final price at which the shares will be offered will be determined on June 6 through the book-building method and will apply to all categories. PrimeTel nevertheless stresses that the issue price will not exceed EUR 0.38 per share, which means that the total cash that the company has earmarked to be raised will amount to EUR 5.45 mln according to Financial Mirror calculations.
PrimeTel will also offer 750.000 shares free to staff and executives. Laiki Investments are the issue managers while CISCO were responsible for the drafting of the Prospectus.
The company will also offer a total of 26.267.000 free warrants in the ratio of 1 for every 6 shares subscribed, maturing 2011.
The existing issued share capital of PrimeTel amounts to 142.5 mln shares of EUR 0.17 nominal value.
Triple Play
PrimeTel commenced the residential provision of its Triple Play (Internet, TV and telephone) service in January 2006 in the first effective challenge to the state-owned CYTA.
By the end of 2007 PrimeTel had 12.000 subscribers compared to 2400 end of 2006.
PrimeTel has built and is operating an island-wide, fully autonomous fibre-optic network. PrimeTel’s network coverage already reaches more than 250.000 households.
The Company wants to invest in more fibre-optic cables in order to lessen its dependence from relying in part on the network of the EAC. The planned investment in this field will amount to EUR 7.7 mln. The company also states that the EAC has decided not to exercise its option to acquire up to 40% of PrimeTel.
PrimeTel Managing Director Hermes Stephanou told the Financial Mirror that the group’s vision is to offer quality services, advanced technology and competitive pricing as it embarks to be the number one choice in the electronic communication field in Cyprus.
PrimeTel owns and operates a regional network spanning Greece, Cyprus, Russia and the UK, providing network connectivity, data communications and IP-based services. It is one of the few in the region that provide the full spectrum of telecom services.
Ownership structure
PrimeTel is 54% owned by Thunderworx, but its parent company is Teledev East, which holds a direct and indirect 60.53% stake in the company. Teledev owns and operates telecoms networks outside Cyprus as well as owning Thunderworx, Telecet, Formula Plus and TimeOnline operating in Russia.
Perikles Magglis is Chairman of PrimeTel and Hermes Stephanou Managing Director. Others members of the Board are Nikos Ellinas, Andreas Christodulides, Philippos Vatiliotis and Ioannis Tirkides. The Group employs a total of 220 staff.
The other principle shareholders of PrimeTel are Manglis Holdings with a 19.22% stake and Celltech Ltd with a 19.22% stake.
During 2007, related parties including companies owned by members of board of the directors had dealings with the company amounting to EUR 2.5 mln.
Financial standing
PrimeTel reported EUR 14.22 mln in turnover for 2007, up 158% YoY compared to EUR 5.52 mln reported in 2006 of which 8.13 mln originated from business accounts and EUR 6 mln from individuals. The net loss for 2007 amounted to EUR 2.16 mln compared to a net loss of EUR 2.69 mln reported in 2006.
By 31 March 2008, the company’s liquidity amounted to EUR 1.25 mln, but it has short and long term loans amounting to EUR 18 mln. No other information regarding the 2008 profitability forecast or future subscriber targets have been mentioned in the Prospectus.
The cost of the campaign to seek a listing on the CSE is expected to amount to EUR 200.000.
