ITEL seeks extra B200m with listing

Cabling distributor slates September IPO

Interlink Telecom (ITEL), a fibre-optic network provider, will hold an initial public offering (IPO) next month to boost capital by an additional 200 million baht to 500 million in preparation for expansion.

The subsidiary of SET-listed Interlink Communication (ILINK), a leading cabling system distributor, plans to list on the Market for Alternative Investment (MAI) in September.

The capital increase is to take advantage of growth in data networks fuelled by the development of the digital economy and strong broadband internet connection.

ITEL plans to allocate 60 million shares to ILINK’s existing shareholders at the par value of one baht per share. An additional 140 million shares will be sold to the public at one baht per share in early September, said Nuttanai Anuntarumporn, managing director of ITEL.

Shares will begin trade in September with a par value of one baht per share. ITEL has appointed Finansia Syrus Securities as financial adviser.

“Thailand’s data network market is expected to see double-digit growth this year, particularly fibre-optic networks that provide a 30% faster rate than traditional data networks,” Mr Nuttanai said.

The local data network service market is worth over 10 billion baht per year. True leads the market with a 24% share, followed by CAT Telecom, TOT Plc, United Information Highway and Symphony.

ITEL has a 9% market share as the company only entered the market a few years ago. The company provides fibreoptic network services to railway and road systems.

Mr Nuttanai said data network service accounted for 65.2% of ITEL’s total revenue last year. Its major customers are the financial, insurance, broadcasting and the government sectors.

The remaining revenue came from project-based networks and data centres.

“We aim to maintain our data network revenue at 60-70% of the total over the next few years,” he said.

Mr Nuttanai said the company will allocate 100 million baht of the proceeds from the IPO to increase the company’s core network speed from 10 gigabits per second to 40Gbps.

Another 100 million will be reserved for expanding its network coverage to the Asean market by the second half of 2017.

In addition, he said the company plans to build a second data centre facility on Bang Na Road, with usage capacity of 5,500 square metres.

ITEL will form a joint venture with Advanced Information Technology and WHA Corporation to build the new data centre. The venture company will have 420 million baht in paid registered capital.

Mr Nuttanai said the new data centre is especially aimed at serving the banking sector.

ITEL’s first data centre is nearing full capacity with a utilisation rate of 85%, thanks to digital transformation and cloud computing that are fuelling greater demand for data storage.

He said the company aims to allocate 40% of its net profit for dividend payment this year.

“We expect our debt-to-equity ratio to fall from the current 6.4:1 to 1.2:1 this year-end,” Mr Nuttanai said, adding that its high debt-to-equity ratio was due mainly to the high investment in fibreoptic networks nationwide in the past three years.

ITEL expects revenue of 700 million baht this year after posting 348 million in the first half.

The company saw an increase of 100% in revenue to 436 million baht in 2015. Its gross profit margin stood at 28% last year.