EstarOnline sets date for NZ exchange offering

By MICHAEL FOREMAN

Christchurch-based online retailer EstarOnline has picked April 15 for an initial public offering on the New Zealand Stock Exchange. It expects to raise up to $15 million.

Chief executive officer Matthew Darby said the number of shares to be issued and their price had not been finalised but would be an- nounced in the middle of the month.

Lead broker will be Wellington-based Deutsche Securities. Managing director Paul Davenport declined to discuss details at this stage, but confirmed that shares in EstarOnline had been suspended from trading on the unlisted market before the float.

EstarOnline shares were five times oversubscribed when they were issued on the unlisted market in November at 33c, raising $1 million. A further issue of 3 million shares followed. The shares last traded at a record high of 110c on February 29, valuing the company at $6.6 million.

EstarOnline, which opened its CDStar online music store in New Zealand last March and in Australia last October, is about to break into the North American market.

Mr Darby said the company had established an office in Halifax, Nova Scotia, and planned to launch a website in Canada early in the second quarter of this year. The location was chosen as "it's an e-commerce centre of Canada, it's on the eastern seaboard where we wanted to be and it's a low-cost base to operate from."

The $15 million raised by the float would be used to "continue development on a global scale," Mr Darby said.

"We will complete the rollout in Australia as well as building the brand there."

Mr Darby refused to reveal any sales figures to date but said they were "pretty well spread" between Australia and New Zealand.

EstarOnline will also be exploiting "other e-commerce opportunities" which will be announced soon, including "a number of US-partnerships."

Mr Darby said a US company was interested in licensing EstarOnline's proprietary software overseas and some "very substantial e-commerce-related operators" were looking for partnerships with the company to market their products in Australia and New Zealand.

Mr Darby was formerly chief executive in New Zealand of the New York-based recruitment agency TMP International, owner of monster.com, which is claimed to be the world's largest employment site. He began development of the CDStar site in October 1998, having been inspired by the success of US-based operations such as Amazon.com.

EstarOnline employs 11 people at its bases in Christchurch, Auckland, Brisbane and Halifax.