this week said it intends to raise around £121.3 million
($194 million) by means of a 3 for 11 rights issue.
Redstone says it will use the money to deploy high-speed
Internet and data networks, and also to purchase Telefficiency Limited,
a switchless reseller of telecoms services which will cost
£16.5 million ($26.4 million) in a cash transaction.
Redstone also announced the acquisition of Interglobe Telecommunications,
a calling card services company, for half a million pounds ($0.8 million).
Graham Cove, chief executive of Redstone Telecom, said the unbundling of
the local loop in the U.K. represented a significant opportunity for his
“With the support of the City, we plan to become the communications
provider of choice for the SME market. This will enable us to deliver
high speed Internet services to a market that has historically been at a
disadvantage,” said Cove.
Both the rights issue and the Telefficiency acquisition will require
the approval of Redstone Telecom’s shareholders. Peel Hunt is the
stockbroker handling the issue, details of which have been
sent to shareholders who will be able to cast their votes at
a meeting on March 20.
Established in April 1996 with financial backing from Apax Partners,
Telefficiency has 37 employees and approximately 5,500 business
customers. It is a reseller of outbound telecommunications services
with a strong sales and marketing team.
Redstone has the stated goal of becoming the alternative network
operator of choice in the U.K., serving the voice, Internet and
data markets. To achieve its goal it has adopted the Smart Build
model used by competitive local exchange carriers in the
The Smart Build strategy puts emphasis on network intelligence,
and entails the co-location of switches on the premises of the
transmission operators that provide transmission facilities.
Redstone believes that its strategy will be enhanced by the
acquisition of Telefficiency, enabling the the enlarged group
to compete with BT and other major telecoms operators in