advantel sells china business

May offer some hope to those holding


US-based Colt Financial to acquire AdvanTel subsidiary 16:12 28/5/2003


ADVANTAGE TELECOMM. No.131489803


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SYDNEY, May 28 AAP - US-based private investor group Colt
Financial has offered $18 million for a subsidiary of Advantage
Telecommunications Ltd (AdvanTel).
Colt, keen to take advantage of AdvanTel's China gateway
business, wants to acquire Orotel Pty Ltd and list the business on
London's Alternative Investment Market (AIM).
Colt's business model involves aggregating a several small to
medium telecommunications businesses under the single ownership of
an AIM-listed company.
Orotel is the first anticipated acquisition in this regard.
Australian-listed AdvanTel has operations in Hong Kong, China,
the UK and US.
Colt is owned by US and Hong Kong investors, with offices in
London.
Under the terms of the offer, AdvanTel will sell all of the
issued share capital of Orotel in exchange for the issue to
AdvanTel of $12 million of secured three per cent preference shares
in the AIM-listed company, secured by the Orotel shares.
Colt is in the process of finalising negotiations with an
AIM-listed company with respect to this transaction.
The terms of the preference shares include an option for
AdvanTel to distribute the preference shares to its shareholders.
Colt will also provide financial assistance to AdvanTel and its
subsidiaries in an aggregate amount of approximately $6 million.
In the interim, Colt has offered to provide secured working
capital loan facilities to Advantel (UK) to fund the continued
operation of the business prior to closing of the deal.
AdvanTel chief executive Mark Stewart said AdvanTel had made a
substantial investment in Asia to develop its international
licensed operations and had a strong customer base in China, Asia
and the West.
"With the support of Colt, AdvanTel is uniquely positioned to
develop its business over the coming months," he said.
The Colt offer has been accepted by the AdvanTel board subject
to shareholder approval at an extraordinary general meeting planned
for July.
Colt says the merger of these operations under its business
model will be advantageous for AdvanTel shareholders because the
value per share has the potential to be substantially higher than
the current stock price, and the capital available will ensure
implementation of a viable business plan.
Subject to satisfaction of certain minimum requirements, it is
anticipated the transaction will be finalised in mid to late July
2003.
AAP