Engin backs WiMAX, buys into Unwired

Stuart Corner
Tuesday, 04 September 2007 10:55

IT Industry - Deals

VoIP and triple-play hopeful, Engin (ASX: ENG), has bought 10.38 percent of wireless broadband operator, Unwired (ASX: UNW) through a number of on market transactions, mainly at 40 cents per share.

Engin said: "the stake has been acquired for investment purposes and should enable Engin, as a significant shareholder, to participate in the growth of wireless broadband in Australia. Engin added that it had "been closely following the global development of WiMAX, and believes the technology is well placed at a point of maturity to deliver both fixed and ultimately mobile broadband solutions to consumers." Unwired owns the vast majority of metropolitan spectrum for the licensed bands across which WiMAX will operate in Australia.

Engin's executive chairman, Neil Gamble, said: "We see a strong rationale for Engin and Unwired working co-operatively. A combination of Unwired's wireless access services with Engin's broadband telephony and TiVo offering would deliver a compelling consumer proposition. As shown by our recent announcement to deliver ADSL2+ to customers, we see broadband access as an enabler of consumer services such as voice and TiVo."

He added: "As we develop new capabilities in voice technology, we see our services operating on multiple devices, across multiple access technologies...Engin is happy to have secured the strategically important 10.38 percent stake in Unwired, but looks forward to exploring other options with the board of Unwired to unlock what Engin's directors believe to be substantial synergies and other benefits in leveraging the two companies' assets."

Engin says it "does not have any present intention to make a takeover offer for Unwired, although the company does not rule out the possibility of exploring a merger transaction in the future."

The shares were bought using debt funding provided by group company of Engin's 33 percent shareholder, the Seven Network (ASX: SEV) on standard commercial terms. Engin says that "Interest on the facility will be capitalised and will not affect Engin's operational cash position."