Digitel prices shares in IPO at mid-range HK$1.05

Digitel priced shares in its IPO on Hong Kong''s Growth Enterprise Market at HK$1.05, the middle of its proposed range, to raise HK$105 million.

Digitel Group, an applications service provider, priced shares in its intitial public offering at HK$1.05 each to raise HK$105 million ($13.4 millon). The price was roughly at the middle of the indicative range of between HK$0.95 and HK$1.10. The funds will be used to develop web-based applications and infrastructure and to invest in potential partners.

Hong Kong-based Digitel sold 100 million shares, which will be traded on the Growth Enterprise Market. It was not immediately clear how many times the shares were oversubscribed, says William Wu, head of corporate finance at lead manager e2-Capital.

Digitel is the fifth company to list on GEM in two weeks. Dozens of companies postponed or cancelled proposed listings following the sell-off in technology stocks in the last few months. Now they are coming back, albeit with lowered expectations.

Digitel provides systems integration, appplications solutions and internet services. The company's main source of revenue comes from systems integration. Now it is hoping to build up its applications software business through its corp2net.com unit. corp2net will provide outsourced services such as web hosting, virtual desktops and e-mail for small to medium-sized companies. Digitel also plans to provide private data networks and broadband internet access through its igreatlink unit.

Digitel posted a net profit of HK$8.7 million in 1999, up from HK$5.5 million in 1998. Revenue rose to HK$42.7 million from HK$34.1 million in the same period. Lit Cheong, a group of power development and telecommunications companies, will hold 64.9% of the shares. Other initial management shareholders will hold 10.3% and the public 24.8%. Lee Chuen Bit, chairman of Digitel, is director and co-founder of Lit Cheong.

The sale was managed by e2-Capital, First Shanghai Capital Corporation and Kingsway SW Securities.

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