NEW YORK-Cable & Wireless Optus, Australia’s second-largest multiservice telecommunications carrier, plans to raise about $600 million in a stock sale Nov. 16, its initial public equity offering.
Merrill Lynch & Co. Inc. and Warburg Dillon Read L.L.C. are global coordinators for the IPO, whose shares will trade on the Australian Stock Exchange.
A total of 1.027 billion shares will be offered, of which 375 million will be new shares and 652 million today are held by institutional investors, including Mayne Nickless, AMP and National Mutual.
Chris Anderson, chief executive of Optus, said founding shareholders long had planned to invite a wider, public investment to further capitalize the carrier once it had established its business.
“During the past 12 months, we have grown revenues by 17 percent … and dramatically reduced operating costs as a percentage of revenue,” Anderson said.
“The future of the Australian telecommunications industry is exciting, with the sector growing at over two-and-a-half times [Gross Domestic Product]. The industry is on the threshold of a new generation of integrated communications, information, entertainment, data, Internet and transaction services.”
Concurrent with the public stock sale, London-based Cable & Wireless plc will gain majority control of Optus by purchasing a total of 805 million more Optus shares for about $870 million.
Cable & Wireless plc will increase its stake to about 53 percent from 49 percent in Optus, whose Global System for Mobile communications network has 1.6 million customers, giving the company a 30-percent market share. The Australian carrier also has satellite, broadband, local access, inter-city and fiber ring networks.
Following completion of the public stock offering, in which Mayne Nickless will sell its entire equity interest in Optus, Dick Brown, chief executive of Cable & Wireless plc, will succeed Bob Dalziel, managing director of Mayne Nickless, as chairman of Optus’ board of directors. Norman Gillespie, chief financial officer of Optus, also will become a board member.
“[Our] decision to subscribe for additional shares and exercise options is a clear indication of [our] confidence in Cable & Wireless Optus as a strong and growing investment,” Brown said.
As of Oct. 1, Cable & Wireless plc, the second-largest telecom group in the United Kingdom, had a worldwide wireless customer base of 3.1 million, calculated in proportion to its equity stake in carriers. This total represents a 45-percent increase from totals for the July-through-September quarter in 1997.
