Visafone

[hispy99]

Visafone seeks N30bn through private placement
Monday, 05 January 2009 00:29 ABDUL IMOYO

After 10 months of operations that have seen its subscriber base growing to 2.4 million, Visafone Communications Limited, an indigenous telecommunications company, is set to raise over N30 billion through private placement of shares to a select group of investors.

A copy of placement memorandum which was obtained by BusinessDay revealed that the company intends to raise the money by offering a minimum of 100,000 shares to a select number of sophisticated investors at N16.90 per share.

The placement which has Zenith Capital as the issuing house opens to investors on January 5, 2009 and is expected to close on February 6, 2009.
Although, the placement exercise is coming at a time when investors are apathetic to equity investments including private placements, analysts observed that the Visafone’s placement could be successful based on the companies business potentials.

A BusinessDay investigation revealed that there are some private placements which had been running for more than four months because the issuers are yet to get the required funds from the target investors.

Besides, investors had been discouraged from investing in private placements by a caveat emptor issued by the Nigerian Stock exchange (NSE) sometime last year. The NSE had warned investors against investing in companies that had promised to list their shares immediately after embarking on private placement of shares noting that some of them could be deceptive.

However, Visafone intends to raise N30 billion to expand its business, specifically to fund additional base stations, deployment of microwave links and fiber backbone as well as increase its working capital.

According to the placement memorandum, the company comes with a track record of accelerated growth of over 2.4 million subscribers, achieved in a period of 10 months with an Average Revenue Per User (ARPU) of $13. The company also boasts of telecommunications services in 160 cities and towns across 18 states of the country, making it one of the fastest roll-outs globally by geography and with a view to expanding internationally.

The company’s ambitious growth plans are supported by an existing installed capacity of five million subscribers served by over 800 base stations. Officials of the company noted that as a triple-play operator, offering fixed, mobile and data services, Visafone has redefined the mobile landscape in Nigeria through its cutting edge EV-DO Rev A technology, bouquet of handsets and aggressive pricing policies.

It was also gathered from the memorandum that Visafone is committed to providing a unique value proposition to its customers in the market place and has so far launched over 50 kiosks delivering customer service.

“The company is in a unique vantage position as the only operator in Nigeria with the combination of a United Access License and 800MHz spectrum across all states and the FCT. Leveraging this distinct competitive advantage, Visafone rolled out across 40 cities/towns in Nigeria from commencement of operations”, the issuing house noted.

The company says it intends to take advantage of Nigeria’s fast growing telecoms market with plenty of room for growth in an emerging economy which has remained relatively unscathed by the global credit crisis.
On the other hand, the managers of the company have expressed their commitment to improving the product offering to Nigerians by investing the proceeds in expanding its infrastructure and growing the company.

[hispy99]

Originally Posted by hispy99

Visafone seeks N30bn through private placement
Monday, 05 January 2009 00:29 ABDUL IMOYO

After 10 months of operations that have seen its subscriber base growing to 2.4 million, Visafone Communications Limited, an indigenous telecommunications company, is set to raise over N30 billion through private placement of shares to a select group of investors.

A copy of placement memorandum which was obtained by BusinessDay revealed that the company intends to raise the money by offering a minimum of 100,000 shares to a select number of sophisticated investors at N16.90 per share.

The placement which has Zenith Capital as the issuing house opens to investors on January 5, 2009 and is expected to close on February 6, 2009.
Although, the placement exercise is coming at a time when investors are apathetic to equity investments including private placements, analysts observed that the Visafone’s placement could be successful based on the companies business potentials.

A BusinessDay investigation revealed that there are some private placements which had been running for more than four months because the issuers are yet to get the required funds from the target investors.

Besides, investors had been discouraged from investing in private placements by a caveat emptor issued by the Nigerian Stock exchange (NSE) sometime last year. The NSE had warned investors against investing in companies that had promised to list their shares immediately after embarking on private placement of shares noting that some of them could be deceptive.

However, Visafone intends to raise N30 billion to expand its business, specifically to fund additional base stations, deployment of microwave links and fiber backbone as well as increase its working capital.

According to the placement memorandum, the company comes with a track record of accelerated growth of over 2.4 million subscribers, achieved in a period of 10 months with an Average Revenue Per User (ARPU) of $13. The company also boasts of telecommunications services in 160 cities and towns across 18 states of the country, making it one of the fastest roll-outs globally by geography and with a view to expanding internationally.

The company’s ambitious growth plans are supported by an existing installed capacity of five million subscribers served by over 800 base stations. Officials of the company noted that as a triple-play operator, offering fixed, mobile and data services, Visafone has redefined the mobile landscape in Nigeria through its cutting edge EV-DO Rev A technology, bouquet of handsets and aggressive pricing policies.

It was also gathered from the memorandum that Visafone is committed to providing a unique value proposition to its customers in the market place and has so far launched over 50 kiosks delivering customer service.

“The company is in a unique vantage position as the only operator in Nigeria with the combination of a United Access License and 800MHz spectrum across all states and the FCT. Leveraging this distinct competitive advantage, Visafone rolled out across 40 cities/towns in Nigeria from commencement of operations”, the issuing house noted.

The company says it intends to take advantage of Nigeria’s fast growing telecoms market with plenty of room for growth in an emerging economy which has remained relatively unscathed by the global credit crisis.
On the other hand, the managers of the company have expressed their commitment to improving the product offering to Nigerians by investing the proceeds in expanding its infrastructure and growing the company.

Whoever has the PP document should please post it here.

[faoogoke]

Jim get strong liver o!

[zainabusman]

Originally Posted by faoogoke

Jim get strong liver o!

Doing a PP at this time probably suggests the company needs the cash. As we all know, banks are seriously constrained in their ability to finance large projects. Afterall Glo did not come to the market.

I am currently using Visafone EVDO Gold. It is nothing fantastic. The speed i get is about a third of the advertised speed. I will revert back to starcomms at the end of the month. It is cheaper.

[JUmurhohwo]

This is definitely not for me. Not when I have lost close to #15M in Starcomms. Thank God it wasn't a loan I invested. A person that has been bitten once by snake will be very cautious on seeing a long and coiled rope in the dark corner.

[zainabusman]

Originally Posted by JUmurhohwo

This is definitely not for me. Not when I have lost close to #15M in Starcomms. Thank God it wasn't a loan I invested. A person that has been bitten once by snake will be very cautious on seeing a long and coiled rope in the dark corner.

I like ur analogy. Only the very strong will invest in any PP at this point in time.

[knightofdelta]

Frankly, I am so surprised. A lot of things can go very wrong here. Jim Ovia has been linked with EFCC questioning just a few weeks ago... Zenith bank is yet to pay shareholders their promised dividends... and he is raising money for a PP...

I don't believe that Nigerians can be really this gullible!

[Job]

Originally Posted by JUmurhohwo

This is definitely not for me. Not when I have lost close to #15M in Starcomms. Thank God it wasn't a loan I invested. A person that has been bitten once by snake will be very cautious on seeing a long and coiled rope in the dark corner.

You appear serious and very funny o, but I can see some points in your saying, and even personally the offer is not for me too. Jim and his team were too meticulous in this offer because they believe people will want to embraces Visafone pp been a communication company.

But they always forget that past history and performance are the best tools for the people to judge them. I don't see anything bad for Zenith to give their shareholders bonus added to their overdue proposed dividend in their year 2008 report at least to compensate shareholders for the bad stock performance in the year 2008. If you analyse GTbanks with Zenith which came out to the public the same year, you will agree with me that Gtbank is even more profitable than Zenith bank in their regular Bonus and Dividend given to the Shareholder. Therefore, I say bye bye to this one.

[olusolakemmy]

jim has got the kind of support dangote usualy enjoy anytime he launches offer of any kind.
Investors will embrace it knowing or thinking this guys are investment gurus and cant go wrong with money.
Mr jim might be banking on such orientation or thinking among the investing public, but have got a news for him, the 2008 world economy recession plus plunge in peoples portfolio have totally change that thinking.

I totally agree with zain that says for jim/visafone to come out to raise fund at this time means they are desperately need funds.

Just to add that this is not for me also.

[panasharp]

We probably should wait to see the details of in the prospectus. However, if it is anything like Reltel and Starcomm forecast that do not even add up, then I am starring clear of this one as well. I will take may chances if the company ever go public (at least 4 years from now to meet NSE listing requirements).

[olusolakemmy]

Originally Posted by panasharp

We probably should wait to see the details of in the prospectus. However, if it is anything like Reltel and Starcomm forecast that do not even add up, then I am starring clear of this one as well. I will take may chances if the company ever go public (at least 4 years from now to meet NSE listing requirements).

yes, the prospectus will give us good information.
but i dont think that at the present investment climate visafone can raise N30billion but as you suggested, lets wait and see the prospectus

[Babs_O]

Originally Posted by panasharp

We probably should wait to see the details of in the prospectus. However, if it is anything like Reltel and Starcomm forecast that do not even add up, then I am starring clear of this one as well. I will take may chances if the company ever go public (at least 4 years from now to meet NSE listing requirements).

I will like to see the details too. But for just the fun of it.

Even if they show a PE of 3. and Price to book of about 1. I will not buy. Some how I think too many telecoms operators will lead to reduced profitability as they compete for customers while putting a lot of investment funds. I suspect Visafone will not be too profitable and they want to spread the risk and get more funds for fighting the battle for profitability (and perhaps take some profit in the process).

[threecrown]

Originally Posted by olusolakemmy

yes, the prospectus will give us good information.
but i dont think that at the present investment climate visafone can raise N30billion but as you suggested, lets wait and see the prospectus

Considering the stress that comes with pps and the opportunities available in the secondary market, a pp at N16 and minimum of100k units is not a go area for me Know matter how beautifully packaged the offer documents is.

[Apache]

Actually, i will be surprised if the offer is not fully taken up. Remember that this is a PP and the usual targets for these PP are usually those rich civil servants and politicians whose sources of incomes has nothing to do with the intricacies of credit crunch.
Somehow, these monies just have a way of finding their way out and i think pple like Jim have realised this.
For instance, it will be a good way to hide those embezzled monies from the different governors that he has been linked with.
Considering the kind of pple he has been dining with, it won't be too hard to convinve them to part with some billions.
Also, it could go the other way round

[hispy99]

Originally Posted by panasharp

We probably should wait to see the details of in the prospectus. However, if it is anything like Reltel and Starcomm forecast that do not even add up, then I am starring clear of this one as well. I will take may chances if the company ever go public (at least 4 years from now to meet NSE listing requirements).

I totally agree with you on this. Before we crucify Uncle Jim, let us see the memo first

[moneymoney]

Originally Posted by hispy99

Visafone seeks N30bn through private placement
Monday, 05 January 2009 00:29 ABDUL IMOYO

After 10 months of operations that have seen its subscriber base growing to 2.4 million, Visafone Communications Limited, an indigenous telecommunications company, is set to raise over N30 billion through private placement of shares to a select group of investors.

A copy of placement memorandum which was obtained by BusinessDay revealed that the company intends to raise the money by offering a minimum of 100,000 shares to a select number of sophisticated investors at N16.90 per share.

The placement which has Zenith Capital as the issuing house opens to investors on January 5, 2009 and is expected to close on February 6, 2009.
Although, the placement exercise is coming at a time when investors are apathetic to equity investments including private placements, analysts observed that the Visafone’s placement could be successful based on the companies business potentials.

A BusinessDay investigation revealed that there are some private placements which had been running for more than four months because the issuers are yet to get the required funds from the target investors.

Besides, investors had been discouraged from investing in private placements by a caveat emptor issued by the Nigerian Stock exchange (NSE) sometime last year. The NSE had warned investors against investing in companies that had promised to list their shares immediately after embarking on private placement of shares noting that some of them could be deceptive.

However, Visafone intends to raise N30 billion to expand its business, specifically to fund additional base stations, deployment of microwave links and fiber backbone as well as increase its working capital.

According to the placement memorandum, the company comes with a track record of accelerated growth of over 2.4 million subscribers, achieved in a period of 10 months with an Average Revenue Per User (ARPU) of $13. The company also boasts of telecommunications services in 160 cities and towns across 18 states of the country, making it one of the fastest roll-outs globally by geography and with a view to expanding internationally.

The company’s ambitious growth plans are supported by an existing installed capacity of five million subscribers served by over 800 base stations. Officials of the company noted that as a triple-play operator, offering fixed, mobile and data services, Visafone has redefined the mobile landscape in Nigeria through its cutting edge EV-DO Rev A technology, bouquet of handsets and aggressive pricing policies.

It was also gathered from the memorandum that Visafone is committed to providing a unique value proposition to its customers in the market place and has so far launched over 50 kiosks delivering customer service.

“The company is in a unique vantage position as the only operator in Nigeria with the combination of a United Access License and 800MHz spectrum across all states and the FCT. Leveraging this distinct competitive advantage, Visafone rolled out across 40 cities/towns in Nigeria from commencement of operations”, the issuing house noted.

The company says it intends to take advantage of Nigeria’s fast growing telecoms market with plenty of room for growth in an emerging economy which has remained relatively unscathed by the global credit crisis.
On the other hand, the managers of the company have expressed their commitment to improving the product offering to Nigerians by investing the proceeds in expanding its infrastructure and growing the company.

There's a difference between having 100 room hotel and 100% occupancy...I know a lot of folks that got bitten by the etisalat u-choose bug but dropped the phone after using the free credit....even zainabusman has said she's going back to good old starcomms!...oversupply will be the bane of this industry and with Jim doing salsa with efcc......not for me!

[zainabusman]

Originally Posted by moneymoney

There's a difference between having 100 room hotel and 100% occupancy...I know a lot of folks that got bitten by the etisalat u-choose bug but dropped the phone after using the free credit....even zainabusman has said she's going back to good old starcomms!...oversupply will be the bane of this industry and with Jim doing salsa with efcc......not for me!

Frankly, i have never made a call to a visafone number! So the 2.4 million is dodgy.

No PP is 4 me right now no matter how fairly priced.

[wanaj0]

Originally Posted by zainabusman

Frankly, i have never made a call to a visafone number! So the 2.4 million is dodgy.

No PP is 4 me right now no matter how fairly priced.

While not campaigning for Visafone, I think they have a strong hold in some Eastern states. I know that they are the 'in thing' in Warri. So the 2.4m is not far fetched. Expect all the Zenith staff, branches etc to have the lines also.

[knightofdelta]

Originally Posted by Babs_O

I will like to see the details too. But for just the fun of it.

Even if they show a PE of 3. and Price to book of about 1. I will not buy. Some how I think too many telecoms operators will lead to reduced profitability as they compete for customers while putting a lot of investment funds. I suspect Visafone will not be too profitable and they want to spread the risk and get more funds for fighting the battle for profitability (and perhaps take some profit in the process).

Originally Posted by moneymoney

There's a difference between having 100 room hotel and 100% occupancy...I know a lot of folks that got bitten by the etisalat u-choose bug but dropped the phone after using the free credit....even zainabusman has said she's going back to good old starcomms!...oversupply will be the bane of this industry and with Jim doing salsa with efcc......not for me!

It is a positive thing that a lot of players are beginning to enter the industry. I doubt it very much that there will be oversupply. Although there may be a little drop in profitability; that drop is going to end up in the pockets of the consumer as marginal benefits. So it is still a good thing.

The industry is about to enter a monopolistic competition, and when that happens, the companies will be forced to improve on quality of service and come up with better tariff plans. At the end of the day, most investors will be consumers and the pie will be larger to go round.

The more they come in the better for all of us due to reduction in dead weight loss from monopolies that bit deep into our pockets.

[ntom]

Originally Posted by olusolakemmy

yes, the prospectus will give us good information.
but i dont think that at the present investment climate visafone can raise N30billion but as you suggested, lets wait and see the prospectus

after what happen in starccom i think even if the will pay one naira year end and sell the placement at two naira the can not sell up to 30% we see what happen to orders b/4 it even zenith bank was sold at 36 naira(p o) today it is 19 naira and i am sure it will hit 12 if this run continues