PHOTO - Nextnation Group CEO Larry Tey.
Malaysian mobile applications and platform provider Nextnation has sold a 10 percent stake to Indonesian conglomerate and mobile infrastructure firm PT Inovisi Infracom, which will secure capital expenditure funds to proceed with a project recently secured from the Indonesian conglomerate.
The multi-million dollar telecommunications services project is to provide mobile platform infrastructure hosting and maintenance services to PT Inovisi Infracom Tbk ('Inovisi') and would allow Nextnation to secure a portion of the CAPEX [capital expenditure) funds of US$5 million that it requires to set up the IT equipment and infrastructure, according to Nextnation's group chief executive officer, Larry Tey.
Tey said that this project would provide Nextnation with a minimum guaranteed revenue of about RM67.5 million (US$22.5 million) over three (3) years. From this guaranteed revenue, the company expects to generate a 31 percent profit margin, or approximately RM21 million (US$7 million) over the same period.
"In awarding the project to Nextnation, this Indonesian mobile infrastructure giant chose us as its select vendor partner to take its telecommunications business to the next level in its vast and populous 250 million Indonesian market," he said.
"In addition, the 10 percent equity stake acquisition indicates our customer's confidence to work with us on a long-term basis," said Tey, adding that Inovisi may increase its stake up to a total of 30 percent in the future.
"Inovisi wants to capitalise on the booming demand for greater IP [internet protocol] services and bandwidth in Indonesia," said Inovisi chief financial officer, Adrian Ooi. "However this requires continuous R&D and capital expenditure to optimize our telecommunications network infrastructure data transfer across large and diverse geographic areas in Indonesia."
"We have evaluated Nextnation and found their technology to be proven and superior," said Ooi. "Therefore, besides awarding them with the (recent) telco IT project, we are taking a stake in Nextnation as we believe they are an excellent partner vendor to create greater synergies for both companies in this space."
Inovisi is a diversified investment holding company in telecommunication, energy & resources, oil & gas, power electricity & engineering, mobile internet, media and e-commerce businesses.
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