Esat Telecom Group is expected to announce this week that it will float up to 30 per cent of the company on the NASDAQ. The company will be seeking to raise around $70-$100 million. It is also in negotiation with CIE to use its railway track to provide alternative telecommunications infrastructure.
Esat Telecom Group is a 45 per cent shareholder in Esat Digifone, the second mobile phone operator and owns Esat Telecom which provides fixed line services to the corporate sector.
It is believed the group will announce its plans later this week. It is understood executives from Esat were in the US last week having preliminary talks with financial institutions and have been working intensively on the project for some time.
The Initial Public Offering (IPO) is expected to take place within five or six weeks. It is thought that this could later be followed by a listing on the Dublin exchange.
A spokeswoman for the company declined to comment last night.
Esat Telecom Holdings is 29.7 per cent owned by Esat founder and chairman Mr Denis O'Brien. Management consultant Mr Leslie Buckley, who is a director of the company, is also a substantial shareholder. Other shareholders include Mr Mark Roden, a close associate of Mr O'Brien, who left the company some months ago to pursue his own projects.
There are also several other shareholders including venture capitalists Advent, which owns 27.3 per cent, First Boston, Credit Suisse and Soros.
It is understood that the company is keen to get more investors in to spread the financial risk in what is a very capital intensive business.
It is believed that the monies raised by the IPO will be used to fund further investment in Esat Telecom. The company has embarked on several expenditures programmes.
Esat Telecom is currently building an alternative telephone network for business users. The first phase concentrates on the Dublin 1,2 and 4 postal areas. It is also building a £7.5 million fibre optic submarine cable between the Republic and Britain.
The company claims that the cable will have a higher capacity than any cable coming into the Republic at present.
It is also in negotiation with CIE to use its railway track to provide alternative telecommunications infrastructure.
Last August Esat raised $35 million through a high-yield US bond issue and has raised $165 million to date. US institutions have a strong appetite for telecommunications companies.
Among those who took part in that funding were Capital Research, Salmon Brothers and Eaton Vance.
Financial figures released by Esat some months ago showed that the group had trading losses of £1.6 million in the first quarter of 1997 and £4.3 million for the full year of 1996. The group invested £8 million in capital expenditure and debt services in the first quarter.
