$30m float on despite crash

By ROB O'NEILL

One e-company is pushing ahead with its planned $30 million share offering despite the crash in technology stocks.

Twenty per cent of eVentures - controlled by Sky TV founder Craig Heatley, Softbank International and Rupert Murdoch's epartners - will be floated, giving the company a valuation at listing of $150 million.

That for a company which reports no revenue for the period from incorporation on January 14 until March 20 and a net loss before tax for the same period of $529,601.

Chief executive Cindy Mitchener said the company was not launching businesses that were "just a good idea."

"All the businesses we are launching have identifiable revenue streams," she said.

The businesses selected for the New Zealand market would be proven overseas successes, she said.

These would be sourced through partner and major shareholder Softbank International.

Cindy Mitchener said that of, say, 5000 business plans viewed by Softbank overseas, 100 might receive investment.

Eighty of these would lose money and 15 would not reach the potential of their business plans.

The remaining five out of 5000 were possible businesses with a good track record to bring to New Zealand.

"It's a business model that minimises the risk," she said.

"We are a pioneer. What we are doing is offering New Zealanders an opportunity to participate in our and our shareholders' belief in the internet."

Despite that "minimisation" of risk, the company's investor statement warns that investing in shares in eVentures should be regarded as high-risk.

Paul Harris, head of investment banking at lead manager JB Were and Son, said the company's valuation had been reached by ascribing a value to the intellectual capital of its founders and with reference to the kind of multiples companies were trading on in the region.

He said the offer price to net tangible asset ratio was about 2.5 times, one of the lowest in the market.

Arthur Lim, senior investment analyst at Ord Minnett, said investors would really be backing the eVentures people.

"Craig Heatley with Sky and INL shows he can spot opportunities and grow them," he said.

"News Corporation's credentials are unquestionable. Likewise Softbank.

"What's interesting is we have The Warehouse, Telecom and Todd Corporation becoming significant shareholders in the venture."

Mr Lim said capital growth was the most important issue with an investment such as eVentures. Ultimately earnings would be important "but in the short and medium-term it's about whether they can identify opportunities and extract value out of them."

Fifty million eVentures shares are being offered at 60c each. Fifteen million are reserved for selected investors, five million each to Telecom, The Warehouse Group and Todd Capital.

Trading of shares is expected to start on May 9.