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RRC takes step towards listing

BALCATTA-BASED Remote and Rural Communications has acquired three telecommunications and infrastructure companies and is pursuing a stock market listing as soon as possible.

In a scrip-based deal worth about $6 million, RRC has bought out interests in junior phone services company Nowtel and two unnamed companies that offer satellite and technical services. These three companies will combine forces with RRC’s equipment provision subsidiary, Cape Telecoms Pty Ltd.

RRC chief executive officer John Barnes said the deal would result in the formation of a single trading entity that would either assume the RRC business or operate as an RRC subsidiary. He said RRC could now provide end-to-end solutions, including complete terrestrial, wireless and satellite coverage.

Implementing both a name change and an initial public offering are two of the company’s highest priorities, as RRC seeks to maximise its value for existing shareholders.

Mr Barnes said while he would like RRC to be ready to list within the next three months, he did not see much point in attempting to raise capital and list after October. If plans went more slowly than expected, the listing could be delayed until next year.

“We need to be able to demonstrate to our shareholders that we’re not just a telco that no-one wants to talk to, we are a substantial organisation with good value in our shares,” Mr Barnes said.

“Whether we change the name of Remote and Rural to something else or not will really depend on where we attack first. Remote and Rural’s fine if you’re out bush in Paraburdoo or somewhere else, but if you’re in the city, people wonder what you’re doing here.”

He said RRC’s public offering would intend to raise about $5 million for working capital purposes, though the company was keen to first sign a number of deals for its services. The signing of some contracts was imminent, Mr Barnes said.

Andre Porozny, a director of Nowtel, said he believed the combination of forces would be able to present significant competition to Telstra by providing a complete equipment and service package.

He said Nowtel already had a policy of avoiding direct dealing with Telstra, and by joining forces with RRC, the company would tackle the major hurdle of avoiding contact with Telstra’s ‘last mile’ network.

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