ESAT chairman Mr Denis O'Brien has emerged as a significant shareholder in Torc Telecom, a company founded last year to target the pre-paid international calling card market.
Torc has completed a private placing to raise £1.1 million, selling 15 per cent of the company. It values Torc at £7.1 million.
Torc's chief executive, Mr Marc Roden, declined to specify how much Mr O'Brien invested, except that it was a "significant amount". It is understood that the figure is under £500,000. Mr Roden was one of the key figures who helped Mr O'Brien get Esat off the ground. He is still a director of the Esat Holdings board. Two other Esat directors have also joined the Torc board. They are Mr Lesley Buckley, a management consultant and close adviser of Mr O`Brien, and Mr Paul Connolly, founder of Connolly Corporate Finance and a director of Hibernia Foods.
Both men are also investing in the placing, which was carried out by Davy Stockbrokers. Mr Roden now owns 65 per cent of Torc, his brother Michael has 5 per cent and staff have 15 per cent.
Mr Roden said the monies raised would be used to continue rolling out its international operations. This will include establishing a new platform to ensure the most cost effective routing of its international services.
Although based in Ireland, Torc does not concentrate on the Irish market. It provides pre-paid calls for tourists and travelling businesspeople. The company claims savings of up to 80 per cent on hotel charges, up to 60 per cent on most European payphones and up to 50 per cent on mobile roaming charges. Mr Roden said the company would now aim at selling its product through retail outlets, especially at airports. It already has sales agreements with Ryanair, Debonair and EasyJet. It is also the largest supplier of international pre-paid calling cards in Britain.
Mr Roden said the company was targeting countries such as Germany, where, although it is the biggest telecoms market in Europe, featuring major international players like Deutsche Telecom, the pre-paid callcard market is completely underdeveloped.
He said companies such as Torc reflected deregulation and the uncompetitiveness of companies such as Telecom Eireann. He said the international pre-paid sector was too small for big telecoms companies to become involved in.
He added that Torc, which is moving to new premises shortly and is expected to expand its 42-strong workforce, will soon start marketing cards on behalf of large telecoms companies.
