Neolink Cyber prices deal

Neolink Cyber Technology, a radio systems and internet services provider, has priced its 140 million share IPO at HK$0.43, the upper end of its target range.

Neolink Cyber Technologies, a radio systems and internet services provider, has priced the shares in its initial public offering at HK$0.43 each to raise HK$60.2 million ($7.7 million) to research and develop its digital radio trunking business for the Chinese market.

The Hong Kong-based company, which provides internet services and sells radio systems to transportation companies, plans to sell 140 million shares, or 25% of its equity, to institutions and list them on Hong Kong's Growth Enterprise Market. It has set aside an overallotment option of 21 million shares. The company made a profit in 1999 of HK$5.16 million, down 48% from HK$9.96 million in 1998. Its revenue in 1999 was HK$22.78 million, up from HK$20.30 million in 1998.

The company expects the funds raised to last it until the end of 2001. After that it will need another HK$22 million to see it through to the end of 2002. It expects to raise those funds through internal growth, bank, private or public debt, and new equity.

Neolink, to date, has relied heavily for its income on one customer: Haoyuan Yingte. Haoyuan received a licence in 1997 to develop telephone information services in 15 cities across China. In 1999 it received approval to extend its services to three more cities. The licence expires in May 2002. Neolink provides telemedia technical services to Haoyuan. In 1998 revenue from Haoyuan contracts accounted for 67.2% of Neolink's total revenue. In 1999 it accounted for 30.8%.

Haoyuan Sky Internet is an internet services provider in which Haoyuan Yingte holds a 60% stake. Neolink has a technical services agreement lasting 15 years with Haoyuan Sky. The sale is being managed by DBS Asia Capital and China Everbright Securities. Trading in the shares is scheduled to begin 25 July.

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