iAsiaWorks, an internet services company, is taking advantage of an upturn in Nasdaq to move ahead with plans to list its shares for the first time on the exchange, according to a filing with the Securities and Exchange Commission.
San Mateo, California-based iAsiaWorks, whose Asian headquarters are in Hong Kong, filed to sell nine million shares at between $13 and $15 each. If the shares are sold at the top end of the range the company would raise $135 million. The company is setting aside 1.35 million shares for an overallotment option, boosting the total amount it could raise to $155.2 million.
"The reason they've probably gone ahead is that market sentiment has improved a bit and they're hoping to take advantage of it," says Jahanaz Naseer, head of Asian internet research at ABN Amro Asia. "The issue is very small, so they should be able to generate that much demand but I'd be surprised if it was heavily oversubscribed."
iAsiaWorks aims to be a one-stop internet service station for companies doing business online in Asia. Its services include internet access, consulting and web-hosting. The company's 3,800 customers include DoubleClick, Nike and the Hong Kong Stock Exchange. iAsiaWorks began operations in 1997 under the name AUNET. In July 1999 it changed its name, revised its business strategy and recruited JoAnn Patrick-Ezzell, formerly chief executive of AT&T Asia-Pacific as its chief executive.
The company plans to use the proceeds of its listing to establish new internet data centres, acquire more space on fibre-optic cable systems, make acquisitions and increase its marketing and sales team. It's hoping to stake out its territory in a market that's liable to become increasingly competitive as companies outsource their internet needs to third parties. In Asia the company faces competition from Asia Online. US technology companies such as Intel, WorldCom, Level 3 and PSI Net also plan to enter the market.
The company posted a pro forma loss of $22.1 million in 1999, compared with a loss of $8.6 million in 1998. In an earlier filing with the SEC the company said it has to rely on the proceeds from the sale of equity to private investors to finance its ongoing operations. It said that cash from operations must increase "significantly" to fund anticipated operating expenses internally.
The listing is being underwritten by Goldman Sachs, Salomon Smith Barney and Morgan Stanley.