Tuesday June 25, 2013
Green Packett may consider selling stake in P1 to strategic investor
By WONG WEI-SHEN
PETALING JAYA: Mobile broadband provider Green Packet Bhd together with major shareholder C. C. Puan may be mulling a stake sale in wireless operator unit Packet One Networks (M) Sdn Bhd (P1) to a strategic investor, amongst other options on the table.
Puan told StarBiz that this, along with an initial public offering, merger and acquisition or collaboration, continued to be the options for P1.
However, the Green Packet managing director and chief executive officer (CEO) said P1's focus now remained on improving its business operations and financial results.
In striving to do so, Puan has embarked on an operational transformation exercise, which began in January, that includes putting in place stringent cost management and controls.
“We expect the exercise to have a bigger impact in the second half,” he said.
Puan will take over Michael Lai's position as CEO of P1 in July.
This year the company will focus on transiting onto the long-term evolution scene. P1 has been investing RM200mil to RM250mil a year in capital expenditure.
“Our capex this year would be lower than the previous year because we'll be focusing more on upgrading our software, instead of spending capex for rollouts and subscriptions,” Puan said.
P1 was in talks to potentially raise funds via borrowings, he added.
Also, earlier this month, the group disposed of a leasehold land together with a 12-storey office building to SYM World Realty Sdn Bhd for RM49mil to raise funds for its working capital, repayment of bank borrowings and/or development expenditure.
Puan said the group would continue to dispose some of its non-core assets to support its current capex requirement.
“Borrowing is a major path we are pursuing. There are still opportunities for P1 to leverage on its business results to do so,” he noted.
In its efforts to reduce operating expenditure, meanwhile, Green Packet underwent a restructuring exercise, which saw more than 90 workers being laid off in March.
Besides that, Puan said the group was also optimising its sales and marketing expansion.
“We are choosing the targeted segments in terms of subscription acquisitions,” he said.
The group is also putting in efforts to reduce its site rental and leasing costs.
Puan said the group targeted to reduce costs by 15% to 20% this year.