Shares gain 44%; Spice Global's Modi says one goal is to ensure dividends
By TEH SHI NING
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(SINGAPORE) MediaRing's share price surged 44.4 per cent yesterday, following news of Spice Global's purchase of a significant stake in the local internet telephony company for about $60 million. Spice Global is chaired by the flamboyant Indian telecom tycoon Bhupendra Kumar Modi, who divides his time between California, Singapore and India.
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| Dr Modi: eyes markets where MNCs do not focus and where people are first-time users of the Internet |
MediaRing's stock opened at 23 cents, five cents above its pre-trading halt price of 18 cents, and hit a high of 27.5 cents before closing at 26 cents yesterday evening. It was also the second-most traded counter by volume yesterday.
Dr Modi, who took over as chairman of MediaRing's board of directors yesterday, said: 'With positive infusion of capital, management expertise, technology, ideas, and our dynamic ambition, we particularly intend to launch a series of innovative telecom and digital products, services and solutions.'
The investment was an important business decision for Spice Global, 'creating a first level footprint in Singapore and ASEAN', he added.
Spice Innovation Technologies spent $34.96 million to buy Venture One's shares in MediaRing at 21 cents each in cash, and also bought directors' share options from Koh Boon Hwee, Walter Sousa and Khaw Kheng Joo for $15.62 million, or 30 cents each.
These agreements, announced last Friday, were closed yesterday. 'I have never done such a fast deal in my life,' said Dr Modi, a scion of one of India's largest business houses, the Modi Group.
Spice also intends to buy the exercisable vested options of employees and certain independent directors of MediaRing at 30 cents a share. Depending on how many option holders decide to sell, Spice will hold at least 18.81 per cent, and up to 20.14 per cent of MediaRing's fully diluted share capital.
After an afternoon meeting with MediaRing's employees, Dr Modi hosted a media briefing at his penthouse at The Sail yesterday evening to share his plans.
He indicated that Spice plans to integrate MediaRing's voice-over-Internet-protocol (VOIP) technology with mobile telephony and expand into major markets including India, Indonesia and the Middle East. 'We want to go into markets where MNCs do not focus and where people are first-time users of the Internet,' he said.
Dr Modi said that another key goal was to ensure that MediaRing pays dividends to its shareholders, which it has not done so far, adding that one of his first steps after taking over the company was to form a 'shareholder value enhancement committee'. He hoped that dividends would start being paid by 2011. 'Our focus will be grow MediaRing's revenues; we will look for the winners and grow them. We hope to make one plus one not two, but eleven,' he said.
Spice Global, Dr Modi's group's global headquarters, relocated to Singapore last year. Being in the world's fastest growing region, or what he calls the i2i (Israel to Indonesia) region, would enable Spice to tap on the heart of the global growth platform for the future, he said.
Ashok Goyal and Suramya Gupta have been appointed MediaRing's new chief executive officer and chief financial officer respectively. Dr Modi's daughter Divya Modi and Mr Goyal have also been appointed directors.
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