Fiji’s Amalgamated Telecom Holdings’ (ATH) recent US$25 million investment from the Asian Development Bank (ADB) to finance a greenfield 4G mobile network in Papua New Guinea, is a vote of confidence in the regional telecommunications powerhouse.
ATH has operations in Fiji, Kiribati, Vanuatu, Samoa, American Samoa, and Cook Islands, but the PNG venture is by far its biggest play. While dominant in Fiji through its Vodafone, Telecom, FINTEL and Fiji Directories businesses, and listed on the stock exchange there, 22% of its earnings are generated outside the country.
That is set to expand considerably. The ABD estimates only 11% of Papua New Guinea’s population is able to connect to the internet. ATH Chief Executive Officer Ivan Fong says they’ve looked at PNG with the ADB before, but with Australia’s funding of the Coral Sea cable, falling satellite prices and Kumul Consolidated Holdings’ construction of domestic fibre and transmission networks, the timing was right to deliver a “last mile” project to reach businesses and consumers—the coronavirus pandemic notwithstanding.
“ We acknowledge that there are three operators in that market and they serve that market to varying degrees, but when you look at the business surveys …in the last few years telecommunications has been creeping up there to the top [as a challenge]. So we think there is an opportunity to provide an uplift to the services in that market and to potentially modernise some of what consumers can have in the country as well.”
An invitation by Amalgamated Telecom Holdings(ATH) to existing shareholders to buy up more shares is still being considered by the Fiji National Provident Fund (FNPF).
FNPF is the major shareholder, owning around 72% of the telecom group.
"We are still assessing that investment," FNPF CEO Jaoji Koroi told Islands Business.
"It's a strategic investment for us. ATH has grown the past years into the Pacific and the rights issue is to fund that growth. Of course the environment now has changed (due to COVID-19) so we have to assess [it] differently," Koroi said.
ATH is listed on the South Pacific Stock Exchange (SPX) and announced late April an intention to raise F$126.76 million (US$58.32 million) via a 1 share for 6.66 rights issue, at a discount price of F$2 (US$.91) per share.
The rights issue, which was to have closed on June 18, has now been extended to July 17.
Shareholders in Fiji’s biggest telecom conglomerate are being offered more shares for cash.
Amalgamated Telecom Holdings (ATH), which owns all major telecom carriers in Fiji except Digicel Fiji, is listed on the South Pacific Stock Exchange (SPX) and announced this week a 1 share for 6.66 rights issue, at a discount price of F$2 (US$.88) per share.
ATH currently trades at F$2.40 per share, so eligible shareholders who take up the offer will enjoy a 40 cents per share discount (17 per cent), although the end result will see a general dilution of shares as over 63 million new ATH shares will be issued in a bid to raise F$126.76million (US$55.89million).
ATH currently has over 422 million issued shares.
In the Offer Document for the rights issue, company chairman Ajith Kodagoda said funds raised will be used to recapitalise ATH’s balance sheet by “repaying borrowings, providing funding for capital investments and for general corporate and working capital purposes” and provide the company with financial flexibility.
Details also reveal that F$100million raised will go towards capital investments while F$26.76million will be working capital.
ATH is majority owned by the Fiji National Provident Fund (72.2 per cent) and the Fiji Government (17.2 per cent) with the rest held by over 1000 individuals, companies and trust funds in Fiji and the Pacific, including the Samoa National Provident Fund.
The ATH rights issue will take place between May 18th and June 18th.