Forum Archive Index - January 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

I was surprised to see this announcement to the NZSE this morning from
Newcall, a "telecommunications" company --

"Newcall has announced that it has acquired 75% of Auckland based embryonic
electricity reseller, Energy Options Limited (EOL).
The purchase price of $600,000 has been met by the issue of 1,050,000
ordinary shares in Newcall at 57cps, with all shares subject to a restraint
of trade.
The total issued capital of the company following the issue of these shares
will be 120,877,685 ordinary shares.
Newcall have retained the management of EOL, both of whom were previously
with Power NZ, to ensure industry knowledge and expertise is protected".


These statements are taken from their press release --

"EOL has customers in the small and medium size business market, and that's
exactly where NEWCALL is focused. We can offer additional telephony services
to EOL customers and our customers have the benefit of reduced electricity
prices.

"In fact we were so impressed with EOL that we changed to buying our
electricity from them early in our discussions, resulting in significant
savings in our energy bill," (MD Norman) Nicholls said.

Nicholls said, "At one level we are able to share call centres and billing
systems while at another we have the exciting prospect through our recently
acquired subsidiary, Iprolink, to provide Internet billing and other
e-commerce marketing to a broader client base."

At a strategic level the move exploits the international trend towards
utility convergence, Nicholls said. The purchase mean we have an opportunity
to explore the provision of utility services at a very low cost."
--


Now, I have to admit that this came as a great surprise to me.  Newcall's
purchase of an ISP, yes, that fits within my idea of a telecommunications
company, but an electricity reseller??  Even though this purchase isn't very
significant to their balance sheet, it does distort my view of the company.

What do other members of the forum think about this move?  I'd be interested
in finding out other people's opinions...

Benjamin Dutton




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