8el Raises £1.2M Funding

READING, U.K. -- Specialist network operator 8el has assured success for its immediate growth ambitions and strengthened its long-term future. This has been achieved through the completion of a recent equity round and the creation of a subsidiary asset finance business.

The 'development round' equity issue was closed at just over £1.2 million, (higher than the £1 million originally planned due to demand). Following the success of the development round, no further equity issue is planned.

Also, in July this year, private Investors elected for maximum take-up of 'rights of conversion' of the convertible bonds (originally issued in 2002/2003) into equity. There was also a full rollover of the Bond's remaining balance of £1.1 million into Variable Rate Loan notes.

In order to maintain the rapid rate of growth in the customer base and the associated network expansion, 8el has chosen to develop a solution to meet capital expenditure demands. 8el's 'partnership' sales approach to corporate clients involves significant investment in Customer Premises Equipment (CPE). Approximately £10,000, of CPE devices (branded 'freeport'), is required for each customer site brought directly onto the 8el network.

The ramifications of the collapse of the telecommunications sector in 2000/2001 has meant that even well funded, low debt companies like 8el, have not been able to access traditional asset finance facilities. As a consequence, 8el needed an answer to guarantee funding the purchase of necessary equipment and sustain the current rate of expansion.

In view of this and due to increasing frustration with the banking sector, 8el has set up its own (not for profit) leasing company with the encouragement of a number of private investors. 8el Leasing Ltd is a fully owned subsidiary of Aggregated Telecom Ltd (trading as 8el) and is being used to fund selected equipment purchases and ensure that the future growth strategy of 8el will not be impacted.

As with all funding to date, 8el has secured funding through the private route, where they continue to receive excellent support and encouragement from its shareholder base, now numbering over 125.

8el