John Linton
As I continue to review the future business directions and initiatives it's becoming obvious that there will be almost certainly be a need to make significant capital investments if we decide to do some of the things currently under consideration. At the moment the initial amounts being considered could be raised from a combination of additional private equity from the current investors and some form of leasing from either the vendors of the equipment we are contemplating or from our current banks. However the amounts are considerable enough to cause us to think very, very carefully about whether we really want to invest so much of our personal assets in the Exetel business.
Another option raised with me recently was to take Exetel public via the M and A operations of our long term law firm who had, possibly, got enough investors to make any share placement relatively simple (as these things go) and at the $8 - $10 million we would probably need they saw little problem in placing the shares. I'd never considered taking that path at so early a stage in the development of Exetel and still think it's far too early to get any realistic commercial return on both the money and the time we have invested to date - bearing in mind that, for me at least, this is the last commercial venture I intend to be seriously involved with and my aim was to make Exetel a 'perfect' company.
In realistic terms Exetel is a good private investment that makes a sensible commercial return for its investors and could make, in the near future, a better return than any other possible avenue of investment currently or likely to be availble to us. Apart from the financial considerations it's very difficult to consider putting Exetel's future in the hands of other people or even having to take in to consideration other people's views on policies and directions. However that's a very personal view and I wouldn't let my own personal views stand in the way of a sensible way forward for Exetel's customers.
The other very significant factor is that I'm not sure that a small communications company is a sensible 'public' investment vehicle at this stage of the industry with so many unknowns on the horizon and so many companies doing so many aggressive things in terms of 'free activation and content offers' and 'free' everything they can think of giving away. If the current trends being experienced by Exetel in terms of revenue and profit growth continue, as planned, for the remaining 11 months of this financial year then whatever price we could achieve for the company today would be much greater then (probably double) - and the future will, almost certainly, of the investments Exetel will need to make will be much firmer.
However I will now take some advice on what would need to be done over the coming months to prepare the company to 'go public' in the event that proved both possible and desirable and, depending on how onerous that is, put in place those requirements.