RealTime IT News

IT&e Completes Offshore Joint Venture

Australian e-commerce solutions provider IT&e will establish a joint venture (JV) company with Malaysia's OSK Holdings Berhad (OSK), to capitalise on the current Asian online share trading boom.

Melbourne-based IT&e, which holds the Commonwealth Bank's online trading site development and operation contract, will join with OSK to establish a series of linked financial services portals that will be marketed under an ASP model to brokers and clients in the Asian market.

IT&e will licence its existing intellectual property and will contribute software development skills, e-commerce integration advice and working capital.

In return, IT&e will take a 40 per cent stake in the JV, and receive technical service fees and a royalty stream over the first three years of the alliance. To cement the deal, the company will issue OSK and its institutional investors up to ten million IT&e shares, with options to subscribe to a further nine per cent of IT&e's expanded capital base at a later stage.

OSK, which will take a majority 60 per cent stake in the new JV, will allow IT&e access to its client base and contribute the majority of the start-up working capital.

IT&e said the JV with OSK, which listed on the Kuala Lumpar Stock Exchange (KLSE) for more than 1.6 billion Malaysian Ringitt (AUS$0.7 billion), will present the company with a wide range of business opportunities.

"It is the first step of our strategy of leveraging our intellectual property to create substantial commercial alliances with major regional players in the new economy of Asia," said IT&e chief executive officer Jeremy Jilla. "We believe there is a limited window of opportunity to forge a new wave of alliances between Asian and Australian companies".

The JV will list separately "at an appropriate time in the future," according to a company statement. Initially, the JV will focus on the South East Asian markets, then pursue similar opportunities in other global markets.

IT&e and OSK will begin a phased program of market development starting with Malaysia and Hong Kong, and then expand its base to other markets in Asia.

OSK executive chairman Dato Nik Din said the alliance with IT&e would help OSK remain at the forefront of technological development in Asia. "This [deal] will enable us to consolidate our market position as the rolling eave of e-commerce that is now beginning here, changes the shape of financial services," said Din.