Recent market fluctuations have not discouraged ComVergent Telecommunications from moving full steam ahead with its plans to list on the Australian Stock Exchange later this month.
The company, previously known as RSL Com Australia, announced yesterday the launch of its initial public offering in which it plans to raise $350 million. For ComVergent Telecommunications, which has been considering plans to float for more than a year, "now is the right time", said managing director Adrian Coote.
"Last year we had two-and-a-bit years experience, now with three-and-a-half years experience (ComVergent) is a very strong story. And if you've got a substantially strong business, there is no need to be afraid of the market."
Coote said investors need not be wary of ComVergent stock, unlike many startup and concept-based companies which may also be listing. "We are no longer a concept company - we have executed," he said. "We have a large number of customers who are thirsty for our services.
"I think the key issue is that we are cash-flow positive. We have a great deal of flexibility in the way we approach our market."
The company, which reported 1998-99 revenue of close to $300 million, is forecasting revenues of $384 million for 2000, Coote said.
Under ComVergent's IPO, 100 million shares will be available for between $3.00 and $3.75 through a retail offer, an institutional offer and an employee offer. If the offer is oversubscribed, 15 million additional shares will be allocated, officials said.
According to Coote, the company plans to use the bulk of the IPO's proceedings to repay loans owing to its parent company, RSL Communications, based in the US. RSL Communications is planning to sell out of ComVergent to pursue opportunities in the European marketplace, Coote said.
"(RSL Communications) has stated what they need for the company's growth . . . It's good use of the funds are far as we're concerned," he said.
Coote added that $25 million from the IPO will remain with the company in the form of a two-year loan from RSL Communications, which may be paid off immediately if the additional 15 million shares are allocated.