Callmate Tellips Telecom Limited (CTTL) has given a mandate to Orix Investment Bank Pakistan Limited (OIBPL) as its financial advisor to arrange badla financing transaction of Rs 750 million for Callmate shares.
According to the mandate, Orix Investment Bank would advise and assist CTTL in the designing, structuring, undertaking book building exercises and placement of large block of common equity shares for Callmate accumulating to Rs 750 million.
The Orix would also act as the placement agent and book building agent for the entire badla financing on behalf of CTTL, diversify distribution of offering that includes retail and institutional investors base.
The financial advisor of CTTL, if appropriate and if so required would also undertake designing, distribution and structuring a badla financing for CTTL with premium over par value. Besides, testing the market to determine the expected badla financing cost for the purchase of CTTL shares under the prevailing stock market scenario.
Market sources told Business Recorder that Orix has almost executed the transaction. The CTTL has agreed to pay 1.5 percent of Rs 750 million as the advisory fee to the financial advisor.
CTTL, a leading long distance and international (LDI) private operator in the Pakistan, which is currently reaching out to the US, UK and Canada, is set to begin its operations in Europe in the first week after Eid.
The company has depicted a growth in all key indicators over the past five years. Its revenue increased at a five-year combined annual growth rate (CAGR) of 62 percent to Rs 3.04 billion in FY05 from Rs 273 million in FY00, and gross profits surged at a CAGR of 84 percent.
The company also turned to a profit of Rs 432 million for FY05, from a loss of Rs 30 million in FY00. Profitability of the company during the first nine months of the fiscal year ending June 30, 2006 rose by 230 percent to Rs 716 million, translating in diluted earning per share (EPS) of Rs 10.95.
However, the profitability and the operations of the company appear to be intact. The shareholders in Callmate Tellips have suffered an estimated loss of Rs four billion, as the stock prices of the company dipped by an incredible 56 percent in seven months from Rs 108 to Rs 47.
At the heart of the problem is the dispute between the CTTL and the external auditors, A F Ferguson. Orix is in the maturity stage to finalise a deal with a Middle Eastern group to be the strategic partner of Callmate.
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