Web infrastructure specialist VivaNET is the latest company to seek a backdoor listing on the ASX through its acquisition by publicly listed mineral exploration company Fortuna NL.
Under its agreement with Fortuna, VivaNET will be acquired for 50 million ordinary shares at an issue price of $0.20 each.
"The Fortuna acquisition will bring to VivaNET the path to becoming a publicly listed company, as well as a bigger working capital to grow our business further," said Cardy Chung, executive director of VivaNET. The company plans to list at the end of June.
Incorporated in March of last year, VivaNET provides an Australia-wide internet infrastructure network to ISPs and corporations offering internet and intranet access services. It currently has points of presence in 25 cities in Australia, which will increase to 40 by the end of 2001, and more than 65 customers.
The agreement also includes options to acquire 18,734,570 ordinary shares at $0.25 each, 18,734,570 ordinary shares at $0.40 each, and 9,367,285 ordinary shares at $0.60 each. It will also issue 3,163,575 options exercisable at $0.20 to Lucent Technologies in exchange for warrants held by Lucent. Lucent supplied VivaNET's initial network rollout and provided additional capital for which it was granted the warrants.
Following the acquisition, Fortuna will change its main business activity from mineral exploration to providing internet infrastructure services, as the retention of exploration assets over an extended period of time may create market uncertainty as to the company's long-term strategy. Fortuna will also change its business name to VivaNET Limited to reflect its new business focus.
The company expects to raise $5 million from its issue of 25 million shares. The capital will be used to accelerate sales and marketing development, and to develop new services such as next-generation broadband internet services, a toll-bypass service for ISPs and call centres, a 24-hour customer helpdesk, web hosting, content delivery and application delivery, said Chung.