BigAir IPO expected to close by Christmas
- 13 December, 2005 15:30
Wireless Internet provider BigAir is expected to close its Initial Public Offering (IPO) before Christmas, with the company hoping to raise $10 million.
Should everything with the IPO go to plan the company will be listed sometime early next year, according to Matt Storey, director of corporate finance at BBY Limited, the lead broker for the IPO.
It is believed the IPO requires both a set amount of money to be raised and a certain number of shareholders to be met, before it can be closed.
In late October, BigAir lodged a prospectus with the ASIC for an Initial Public Offering to raise up to $10 million by offering for subscription 40 million shares at an issue price of 25c.
The company has already built its own fixed wireless network which covers large areas of Sydney at download speeds of up to 1Mbps.
Money raised from the IPO will be used to fund the development of new markets in Melbourne, Canberra, Brisbane and the Gold Coast. It will also be used to further the development of VoIP systems as well as pay off outstanding debts such as the acquisition of Veritel Wireless earlier in the year.
Storey was confident of BigAir's future, based largely on the past performance of company CEO, Jason Ashton.
Ashton was the co-founder of Magna Data which eventually got sold to Davnet.
"Jason built that business with $100,000 of capital and sold it for $20 million, 5 years later," he said.
That could have been $200 million had he waited a little longer and sold to NTT Japan around the time OzEmail was bought by WorldCom, Storey said.
The BigAir business was designed to overcome the problems Ashton faced with MagnaData and Davnet, he said.
Storey illustrated several positives including: Extremely low CAPEX - $3 million for a national city roll-out of 70 base stations; no reliance on other telcos and Telstra to get to the customer for the last mile, hence a high margin; and low running costs for the network - base stations on average cost $500 per month for rooftop rental.
BigAir is ending the year with fervent activity. It's subsidiary, Veritel Wireless, took over the OzEmail wireless (iBurst) customers at the end of November. As part of that acquisition, BigAir acquired more than 3000 wireless customers, taking it combined customer base to over 7000. It hopes to have 10,000 customers by the end of next year.