WebCentral postpones capital raising

WebCentral postpones capital raising

A cruel investment market induced by last year's tech-stock devastation has forced Web-hosting giant WebCentral to set back its capital raising venture.

The capital raising, believed to be in the vicinity of $20-30 million, was due to be completed by the end of the month. In the current climate, however, Lloyd Ernst, WebCentral's CEO, says it will be another two or three months in the making.

"The market is certainly a lot tougher than any of us expected it to be but there is still money out there," he says. Ernst believes the real challenge is in justifying the valuation of the company. Since the capital raising initiative was launched in December last year, he has conducted over 35 interviews with investors whose technology stocks are beyond salvation. "They've been burnt and it's made them tougher," says Ernst.

Meanwhile, WebCentral recorded its best month ever in December 2000. The company enjoys strong backing in FTR Holdings, which owns a 49.6 per cent share and is assisting in the valuation. Ernst says a figure has been established but is unable to divulge what it is.

The capital will be used to fund the company's expansion into Asia. Ernst says the Australian operation, while solid, has limited growth opportunities. The company has already dipped its toe into the region but desires more traction.

WebCentral is also flirting with the idea of an ASX or NASDAQ listing. "We've certainly prepared our financials to list on either market but at this stage there's no compelling reason to do so," says Ernst. "We might look at doing it if the market recovers."

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