The mobile company Nortel is jumping on the wave of new companies that have hit the Stock Exchange. The company will raise 75 million fresh capital to continue investing in the corporate market, launch wireless broadband and have enough money until they make a profit.
– Undoubtedly. “If it weren’t for the Mercury market, we would never have thought about this,” said Arild Hustad, chairman of Nortel.
Together with founder and CEO Christian Pritchard and the rest of the Nortel team, they will now get the company on the stock exchange – preferably in November.
Hustad talks about the Mercury market, the market for smaller and new companies on the Oslo Stock Exchange. Merkur will soon change its name to Euronext Growth and so far this year it has taken over almost all new listed companies.
Nortel launched its mobile services in the corporate market a year ago. There they compete against everything from Telenor, Telia, Ice, Fonero, Unifon, Atea and many others.
On Wednesday, the company officially goes out and starts the subscription period for the issuance of shares, where the company will raise 75 million new capital. The subscription period lasts until Thursday.
– When will you go public?
– The goal is November, and until it is Friday, November 13, I am happy, Chaktas Hustad.
The launch of the Nortel Stock Exchange takes place after an intensive period in telecom. Financial technology company Vips recently announced that it is launching mobile services in the private market, and Telenor and Telia have provided updates on their 5G turnover.
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Values of 150 million before the release
– Only a month ago we celebrated a year in Nortel. This year we end with about 40 million NOK turnover and according to the latest data from Ncom, we are growing faster than ice, Atea and the Union together in the company market, Pritchard is satisfied, citing statistics from the National Communications Authority.
Nortel hired Sparbank 1 Market, law firm Kwale and First House to contribute to the listing and issuance.
The company is estimated at NOK 150 million before the issuance of NOK 75 million, and the price of 4.8 million new shares will determine the new market value.
“Apart from the fact that shareholders now have the opportunity to trade B акrs shares, the list also contributes to the new dynamics and capital of the entrepreneurial company,” Hustad said.
CEO and founder Christian Pritchard will not say anything specific about investors who have said they are ready to participate in the issue so far.
– But we received very good signals. In addition, existing owners make up a significant portion of the problem.
In addition to contributing new money to the box office, the show has another function:
“We are coming out with this to make sure we have a large enough number of shareholders and a good enough spread of shares to meet Mercury market listing requirements,” Pritchard said.
Christian Pritchard says the company continues to grow. When asked from which segments they receive the most customers, he points to the lower part of the SME market, ie the smallest companies.
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– Do you need 75 million until you are self-financing?
– Yes, and with that amount we have strong funding and good. “Then we have the strength to grow and explore the possibilities,” Pritchard said.
– What acquisitions are you thinking about?
– I will not say very specifically about that now, but we have several candidates in the binoculars. It can be about services that we can add to our subscriptions, but also about various customer bases that may be of interest, says Pritchard.
“We find it particularly interesting to be able to consolidate in our segment,” Hustad said.
– Technology got a new spring
Hustad returns to the stock market with this transaction. Until 2018, he was the CEO of Link Mobility. Hustad left after the company was acquired and removed from the list.
Ironically, the company he previously led also returns to the stock market at the same time as Nortel. The fact that a mobile company is listed on the stock exchange is rare in Norway, says Hustad.
Prior to becoming head of Link Mobility, he was head of Tele2 Norway, which acquired Telia.
– I’m happy. It’s fun to build companies, and Christian and the team are very good at running the company. They did incredibly well in the first year, says Hustad.
“It’s a little fun that we at Nortel are now becoming the third cleanest telecom company on the Oslo Stock Exchange after Telenor and Ice,” Hustad said.
Telia, the second largest mobile operator in Norway, is listed in Stockholm and Helsinki.
Atea is also listed on the Oslo Stock Exchange and sells mobile subscriptions in the corporate market, but Atea is not a pure telecom company but a major supplier of technology.
– I think technology got a new spring. When I was head of Link Mobility, almost all market interest was related to agriculture and everything in oil and gas. This year alone, a number of technology companies are listed on the stock exchange, he continues.
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In addition to mobile subscriptions and related company solutions, Nortel will eventually offer 5G wireless broadband.
A wireless broadband network, or “fixed wireless” in the language of industry, was quietly launched by Telenor last spring.
In retrospect, Telenor has stepped up its pace of promotion and players such as Telia, NextGentel and the newcomer etetNet have thrown themselves into the battle for clients.
Currently, the service is offered via 4G, but with the development of 5G, the capacity for broadband delivery via mobile network will increase dramatically.
– We will do it in parallel with the spread of 5G and it will be a focus area for us. “Our systems are set up for that, but our turnover is likely to start in the second half of 2021,” Pritchard said.
He adds that wireless internet revenue can be up to 20% of sales in a relatively short time after launch.
Nortel states that as of today, 3,600 companies with a total of 14,000 customers (SIM card) have been hijacked. Half of the customers arrived in 2020. The goal is to have 17,000 by the end of the year.
Pritchard previously told E24 that he expects it to need 15,000 to 20,000 customers (users) to become profitable.
– How many customers do you need to have before making a profit?
– We need up to 35,000 SIM cards to make a profit on EBITDA (gross operating profit, journals.am), says Pritchard.
The company aims to reach 39,000 customers (SIM cards) by the end of 2021, which means they expect operations to increase once next year.
By 2025, the goal is to have 142,000 users and 25,000 wireless broadband users.
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