Freshtel gears up for $13.2 million capital injection

Stuart Corner
Monday, 24 October 2005 16:37

IT Industry - Deals

Shareholders of ASX-listed VoIP technology developer and service provider Freshtel Holdings Limited have approved the company's plans to raise $13.2 million through the issue of 60 million new shares.

The issue was heavily oversubscribed. CEO, Michael Carew, said the offer had been taken up by existing shareholders and by a broad range of new institutional and retail investors. "We believe it reflects the exciting opportunity we have to accelerate our international expansion plans and establish our position as a global provider of VoIP telephony solutions."

In his address to shareholders, Carew said: "A major investment will be in our UK rollout, including network infrastructure development, installation and project management, marketing and operating costs...The final area of investment will be in the ongoing development of our business in the US, to fund initial infrastructure and operating costs...We are one of the few groups globally who can offer a fully integrated wholesale Internet telephony service - a real opportunity for us to offer white label solutions to groups such as original equipment manufacturers, ISPs, retailers or other consumer driven groups who wish to offer Internet telephony services to their existing customer base."

Carew added: "The scale of these opportunities has been greater than we imagined and this proposed capital raising will facilitate the next stage of the global commercialisation of our white label VoIP products.

"2006 will see us launch a number of wholesale business models in different countries, all using our core network technology. As such we will bear the implementation and launch costs in the current financial year. However we would expect the 2007 year to begin to more accurately reflect the earnings potential from some of these services."