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.
