Fixed Wireless Business

Australia's Wireless LAN Carrier

Australia's SkyNetGlobal (AU:SKG) secured $2.5 million to continue operating and expects to be cash flow positive by the end of the calendar year.

by Craig Liddell of australia.internet.com [February 1, 2002]

Australia's largest wireless LAN carrier, SkyNetGlobal, has secured $2.5 million through a private placement. The company predicts to be cash flow positive by the end of the calendar year.

All funds raised are from existing shareholders, including $200,000 from Sooncorp, a company owned by SkyNetGlobal founder and CEO Jonathan Soon.

The capital raising was split into two tranches, the first in November, as the total placement would propel one major shareholder, Alby Australia beyond the 20 percent shareholder threshold.

First stage funding of $1.25 million was invested by PIPGALL Australia, Ipmuda Australia, and Alby. The second half of the $2.5 million was contributed by Alby and Sooncorp.

Following the allotment of all shares the top three shareholders will be Alby Australia (33 percent), PIPGALL Australia (13 percent), and Sooncorp (12 percent).

SkyNetGlobal's major shareholders include Cabletron Systems, Qantas Airways, Ernst & Young, Leo Burnett and Nina Wang of the Chinachem Group in Hong Kong. Wang is the chairlady of the Chinachem, one of the largest private property developers and investment holding companies in Hong Kong with extensive interests throughout greater China. US-based Cabletron is a holding company for networking and telecommunications companies.

In September 2000, Qantas took a 5.4 per cent stake in the soon-to-be-floated SkyNetGlobal after striking a deal to roll out high-speed Internet access through the airline's 40 global Qantas Club Lounges.

The company offers business travellers broadband wireless access to email, Internet and office LANs in airports, hotels and conference centres. "With 80 Points of Presence in 48 cities worldwide, SkyNetGlobal has the largest broadband wireless network in the world that supports the internationally recognised IEEE 802.11b standard providing data transmission of 11 Mbps, designed specially for the business traveller."

"The funds raised will provide the company with further working capital to achieve it's objective of being cash flow positive by December 2002," Soon says. "Following the events of September 11th SkyNetGlobal had to suspend its Asian fundraising plans, re-evaluate its marketing and concentrate more focus on the domestic market.

SkyNetGlobal's operating costs have been reduced by more than $2 million per annum with a reduction in debt of $1.7 million. "We have revised our marketing strategy and will shortly be launching attractive new services which, together, should allow us to achieve cash flow positive status this year," adds Soon.

The company, which trades as SKG, was trading at A$0.09 yesterday.

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