INTERVIEW-PacNet sees acquisition growth
May 14, 1999 09:50 AM
By Doreen Siow
SINGAPORE, May 14 (Reuters) - Pacific Internet Ltd expects
to grow its business mainly through acquisitions
this year, chief executive Nicholas Lee said.
The Internet service provider (ISP), a unit of
SembCorp Industries , would have no problem funding its
expansion as it has not touched the US$35 million that it
raised from its public offering on Nasdaq earlier this
year, Lee said in an interview with Reuters.
"We have not spent any of that money yet. We also
have the ability to raise some money from debt and
lastly we will try to use our stock as currency," he
Internet companies in the United States,
most of which trade at very high valuations, often
give out their shares to acquire new start-up
PacNet has seen its share price almost
quadrupled since its listing in early February.
said all options would be considered during an
acquisition but the company would first employ its cash
before going into debt or use its stock.
company has just filed with the Securities and Exchange
Commission for up to 2.125 million shares.
the issue of the vendor shares was mainly to meet
investors' demand for greater liquidity in PacNet shares.
On prospects, the group saw good growth potential in
the region as well as in Singapore, its home base.
"Internet penetration in Singapore is only 15 percent of
the population. There is no reason why it should not
be 100 percent."
On the region, PacNet
expects to launch an Internet service in Australia and
probably in India this year.
"We don't have an
Internet licence yet in India. But when we last spoke to
the Indian authorities, they felt we were very close
and it was only a matter of going through the
On PacNet's plans to expand into
telephony services, he said he could not give a time-frame
as to when that might take off.
PacNet had permission from the regulatory authorities
and it has also got callback rates from large U.S.
resellers but added that it needed time to "learn how to do
it" as it was not a telephony company.
competitors for PacNet in the region were the national
telecom companies, like Singapore Telecom , HongKong
Telecom and Philippines Long Distance Telecom , who have
their own respective ISPs.
However, he did not
foresee competition on the Internet telephony front from
national telcos as that would mean the latter
"canabilising" their own market.
The company also
expects greater economies of scale when it expands
Dial up access charges would still be the
main revenue contributor though it may not be the most
profitable part of the business, he said.
said electronic commerce was also not taking off as
fast as expected in the region.
companies in Singapore are really not ready for e-commerce.
If you try to buy things from these guys, you can't
buy anything. Our banking system is also not quite
He noted that banks in Singapore as well
as Hong Kong could only take payment for purchases
on the Internet in local currencies or U.S. dollars,
making it difficult for either cities to fulfill their
ambition of being an e-commerce hub.
"How are you
going to sell regionally? You need a critical mass," he
((Singapore Newsroom +65 870 3080, Fax
+65 776 8112 firstname.lastname@example.org))
on AOL. I do not short, in general. Although I do
believe that any short in the 140 to 160 range will be a
long term winner. When the stock trades at 140+ you
can pick up Aug. 80s for 2 bucks or so. When the
stock drops to 120, you can sell those same puts for 4.
100 % return. Not bad. And if ever the people find
out, like I believe, that the emperor has no clothes,
you have hit a major home run, i.e. 1000 to 2000
NOW GO AND MAKE SOME MONEY.
Everyone rates it a buy. I dont know about AOL in
the next few weeks but every cable co. out there is
going to be begging aol to come aboard. There is way to
much competition. AOL can make or break a company so
just hold on to this baby and watch it soar. Oh every
mm is buying as much as they can they know this is
You say our days are numbered, but all the analyst, even the conservative ones, are up-grading! thank god we have you to lean on for accurate information instead of the inaccurate info from analyst!
cow and that is why when the hypers aren't buying
in. It is a big time short opportunity. People are
seeing the hughes deal for what it is. A pie in the sky
attempt to get into broadband without cutting an ATT
deal. Let's face it. AOLs days as an ISP are numbered
and as a portal alone it doesn't have nearly the cash
flow or the value for big money investors. Big money
is clearing out on this baby. The funds are lowering
there percentages of holdings because they don't want a
raft of POed investors who thought speculative stocks
were not part of the deal.