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NewSat Board initiates changes for success

  • 15 June, 2007 12:03

<p>Less shareholders, less shares and more directors on the agenda</p>
<p>NewSat Directors have today announced their intention to reduce the number of shareholders with unmarketable parcels. NewSat’s recurring registry expense is disproportionate to the actual value of many holdings and the buy-back process offers the company significant long term savings in its operations after the initial up-front expense.</p>
<p>There are 5,097 of 9,746 total shareholders in NewSat currently owning unmarketable parcels, such parcels defined as $500 or less. “It is a sound and common practice to buy back these very small and unmarketable share parcels,” said Chairman, John Walker.</p>
<p>“Undertaking a Share Sale Program, by which unmarketable shares are pooled and sold by the company through their appointed broker, makes absolute sense for NewSat and the Board will make an announcement regarding timing of the buy-back shortly.</p>
<p>“Serious consideration is now being focussed on share consolidation too, once we are confident of positive results and notwithstanding day trader activity, the stock is capable of holding its value on the basis of market confidence.</p>
<p>“Steady profitable growth, combined with eliminating the unmarketable parcels, will create a favourable environment to successfully consolidate shares on issue.</p>
<p>“Consolidation has been on the agenda for some time and Directors will draw heavily on the experiences of other small caps to ensure that when consolidation does occur, the timing is right. But we must stress that NewSat will not proceed with this initiative unless and until we are quite certain of our ability to predict and generate constant, satisfactory earnings,” Mr Walker said.</p>
<p>The Directors are constantly reviewing the composition of the Board and is currently considering the number of directors appropriate for NewSat. “The directors of NewSat have worked intensely for the company. There are only three of us and we have shouldered the responsibility for many years to keep the directors’ fees low and without directors’ indemnity insurance due to the prohibitive cost of such insurance,” said Mr Walker.</p>
<p>“We are pleased to report that policy fees have now been substantially reduced, and with directors’ insurance now in place, combined with a sound history of corporate governance, we expect to increase the Board to five directors over the medium term and add appropriate skill sets to assist the company to prosper.”</p>
<p>“NewSat is growing and moving into a period characterised by predictability and sustained performance as the underlying revenue of the company is growing in a trend of month on month. Extra-ordinary items can still produce unexpected isolated troughs in results, however.</p>
<p>“On the back of this, the Board expects to be in a position to issue a forecast in the new financial year.</p>
<p>“NewSat understands that in some quarters there is concern about our balance sheet when pitching for major deals. In these events, today, we often co-bid with world-renown corporations to combat and overcome this perception.</p>
<p>“We understand, too, that the investor market is very focussed on EBITDA.</p>
<p>“We are, too, and are taking the steps outlined as being significant progress in this regard. We also think the NewSat recurring revenue business model will triumph. We have the potential to evolve into an ASX 200 company. NewSat is certainly aiming there.</p>
<p>“Given we have now bedded down the earth station and antenna purchases from Intelsat and Channel 9 Networks, NewSat is today bidding for large government and corporate contracts.</p>
<p>“We have found already there is wide acceptance of our technical capability and excellence throughout the industry,” he said.</p>
<p>“Our ability to partner is growing as our reputation increases, too.</p>
<p>“Since NewSat’s recent transition to being a pure satellite player the results have been certainly encouraging and achieved quite rapidly.</p>
<p>“Whilst having a great many shares in the market is undesirable it has been brought about by a sound strategy of raising capital through equity rather than debt.</p>
<p>“We are committed to driving NewSat to become a great company and look forward to the shareholder support through this next set of changes as we continue to build the business,” Mr Walker said.</p>

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