ChinaTel Group, Inc. (ChinaTel) (OTC Bulletin Board: CHTL)
$1.66 Last +39% Volume 5.7M
Building the Largest Wireless Network in the World
From The Editor
There may be issues with Sovereign Debt, but the funding spigot for China’s Wireless Network is in full progress. $1.33 Billion is going to work in China where you will have a HUGE wireless Network by June 2011. I want to go there and spark up my laptop… email Tony Isaac from the Isaac Organization and Thank Him.
I’ve been watching this stock since Thanksgiving because it hit my radar with volume spurts as it went into the year-end marks for US Stocks. This stock has sold off hard for all of 2010 and has been pretty volatile for Q4 2009 and Q1 2010 rallying from around .50 cents to near $1.80 and pulling back to around .80 cents. Today’s move near the old highs is a good sign technically as the actual build out of the ChinaComm network begins.
Volatility is often a good thing as it shakes out the weak holders. This clearly looks like a longer term hold, where you will need to not over think having this name in your portfolio. I suggest you listen to the quarterly conference calls and avoid “every tick” watching…infrastructure build outs that I personally observed in the 1990 US Wireless build drove you insane if you were an investor. This sector is incredibly profitable (as long as you avoid NASDAQ bubbles),requires patience and project management. This assumes you have all the money you need. It seems CHTL has the money and I will be watching closely as this story progresses….Keeping my goal in mind of Emailing Mr. Isaac, I will be actively avoiding watching “every tick”.
Below is recent Press from CHTL
CHTL.OTCBB A leader in high speed wireless broadband and telecommunications infrastructure engineering and construction services, today announced it has signed and received the first combined installments of two stock purchase agreements calling for a total investment of $640 million into the company. The combined investment represents 48% of the total outstanding shares, valuing ChinaTel in excess of $1.33 billion.
The investors have each made initial payments called for under their respective contracts. By March 1, 2010, ChinaTel will have received $241 million, and the balance of $399 million by June 1, 2010. Proceeds from the contracts will primarily be used to expand and deploy wireless broadband networks worldwide in addition to repaying existing financing notes. Full details of the transactions are available on Form 8-K filed with SEC at www.sec.gov.
ChinaTel's CEO, George Alvarez, stated, "With this infusion of capital, we can pursue our global expansion plans, and accelerate the deployment of the Chinacomm network in the Peoples Republic of China (PRC). We expect to complete build-out of the first twelve PRC cities by June, 2011. When completed, the Chinacomm network will be one of the largest wireless broadband networks in the world."
The investment partners are Excel Era Limited (Excel), a Hong Kong-based investment group, and Isaac Organization, Inc. (Isaac), a Canadian-based investor. Excel is investing $480 million and acquiring approximately 159.6 million new shares of ChinaTel's series A common stock to be issued, which represents 36% of total shares issued and outstanding as of the closing date. Isaac is investing $160 million and acquiring approximately 53.2 million newly issued shares, which represents 12% of the total outstanding shares. The price per share for both transactions is $3.0075.
ChinaTel's President, Colin Tay remarked: "We have worked very hard to execute transactions beneficial to both our shareholders and our new institutional investors. We selected these investment partners because they provide unique alliances that will facilitate ChinaTel's ability to penetrate additional markets globally."
Isaac Organization has previously served as a strategic adviser to ChinaTel in addition to developing and managing a portfolio of assets valued in excess of $5 billion, including significant interests in Asia. "We have been involved with ChinaTel in an advisory capacity and are very pleased to take a larger role with the Company. Being very familiar with the ChinaTel story, Isaac Organization seized the opportunity to invest in the next generation of a high-demand technology to meet the needs of rapidly emerging markets," said Tony Isaac, CEO of Isaac Organization. "The timing was right for this investment, and we look forward to our increased role with and the future of ChinaTel."
In conjunction with the financing, ChinaTel is appointing Tony Isaac and Charles Wang to its board, expanding the number of company directors from four to six. Mr. Wang is CEO of Excel, which has a strategic presence in numerous markets, including India, Argentina, Peru and Brazil.
"Being asked to join the board of ChinaTel is a great honor. I look forward to working closely with the management team and bringing my relevant technology management and public company board experience to ChinaTel," said Charles Wang.