ESAT Telecom has confirmed that it is to seek a listing on the Nasdaq through an offering which will raise $78 million (£53 million) after the sale of 30 per cent of the company. The deal will value the company, which provides fixed line telecoms services for the corporate sector at $236 million. The move will reduce the current management's shareholding from 33 per cent to 22 per cent. Esat chairman and founder Mr Denis O'Brien will retain 18 per cent, valuing his stake at $42 million, or about £29 million.
The remaining 45 per cent will be held by Advent, Credit Suisse, Metlife, Soros and John Hancock Mutual Life Insurance.
It is expected that the shares will be offered at $12-$14 and the company said it expects to seek a listing on the Irish Stock Exchange within 18 months.
The company is also seeking a simultaneous listing on the Easdaq, the European version of Nasdaq.
The offering will be through six million American Depository shares, representing 12 million ordinary shares.
The company, now known as the Esat Telecom Group plc will be targeting financial institutions in Europe and the US. It says it will use the monies raised to invest further in Esat's fibre optic network.
The company will embark on an intensive roadshow from next week, as part of its exercise in attracting investors. The shares will be priced on November 6th and trading is expected to begin on November 15th.
Mr O'Brien said yesterday that the company did not immediately need the monies it was raising. At present it has £50 million cash in the bank, he said.
He said the group was using the opportunity to raise money now for future investment because the markets are very strong at the moment. He said the money would be used primarily for investing in infrastructure for Esat Telecom's operations.
Esat Telecom is also a 45 per cent shareholder in Esat Digifone, but Mr O'Brien said that company, which operates the second mobile phone licence, is fully funded.
Employees will also be getting shares, similar to the method used by Ryanair when it floated, Mr O'Brien said.
He said the company would get a far better rating in the US because it will now have its own fibre optic telecommunications network. The company is currently investing £27 million and is installing its own networks for carrying business traffic in six Irish cities.
`The further you can carry your own network, the greater the savings are," he said. He said the company is now moving into offering more data-based services. "We are creating a brand new telecoms company," he said.
Mr O'Brien claimed that Esat is now carrying 50 million of the 500 million business minutes coming out of Ireland.
He said he was confident that the public offering would be well-received. "Esat is now much better known than it was two years ago," he said.
The company is no stranger to the US. It has previously raised $165 million through bond issues.
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