Keppel Telecommunications & Transportation Ltd (Keppel T&T), through its wholly owned eBusiness investment arm Apsilon Ventures Pte Ltd, will purchase 13,350,000 shares for a consideration of $14.685 million in Singapore's leading technology and eBusiness applications developer and enabler Stratech Systems Limited (Stratech). Keppel's subscription represents 27.8% of the 48.07 million shares placed out as the institutional investment tranche in Stratech's current IPO exercise.
Said Mr Ng Eng Ho, Managing Director of Keppel T&T, "Our strategic investment in Stratech allows us to leverage on Stratech's resources and capabilities to develop the tools and applications that will place Keppel in a good position to undertake the rollout of broadband technologies such as 3G and LMDS networks. As a proven developer of advanced technologies, Stratech will complement the capabilities of our telco project engineering arm Keppel Communications.".
Keppel T&T, through Keppel Communications, has a solid track record in rolling out wireless networks such as GSM and CDMA for service operators and telco manufacturers such as Nokia and Ericsson both in Singapore and the Asia Pacific region. The company is currently trialling LMDS networks in Singapore.
Dr David Chew, Chairman and Chief Executive of Stratech, said, "We are indeed honoured to have Keppel T&T as our first strategic investor for the significant launch of our Initial Public Offering this week." "With Keppel T&T as our partner and strategic investor, Stratech is strategically placed to exploit the exciting convergence of information, telecommunications and mobility in the New Economy. Stratech has set its sights to expand globally and to further build and strengthen our long term working relationship with Keppel T&T in Singapore and overseas," said Dr Chew.
Stratech's IPO launched on 25 July saw 66.77 million shares being offered at $1.10 per share. Of this, the institutional investment tranche represented 48.07 million shares whilst a total of 3.1 million shares are reserved for employees and 15.6 million shares are offered to the public. The IPO is lead managed, underwritten by The Development Bank of Singapore Ltd (DBS Bank) and co-underwritten by Citicorp Investment Bank (Singapore) Limited.
Net proceeds from the IPO of about $55 million will be used for the development of Stratech's eBusiness ventures, the establishment of an incubation fund for IT and Life Sciences companies as well as to fund its new technology development, working capital and business expansion. Stratech posted pre-tax profit of $5.91 million on revenues of $11.44 million for the year ended 31 December 1999.
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