Interlinked Technologies will become profitable in 4 years
Category: Capital Market
Managing director of Interlinked Technologies plc, Olusegun Layode speaks about prospects in the company as it concludes a rights issue of N972m to shareholders
Genesis of Current Offer The genesis of sourcing for additional funds to restore Interlinked Technologies plc actually started when a new core investor consisting of some young Nigerians took over the affairs of the company in 2008. After taking a proper look at the condition of the company, it became clear that the need to inject in fresh funds was overwhelming as a corporate entity. As a matter of fact because of the confidence the new core investors had in the potentials of the company, they were ready to bring in more funds, but this had to be done in line with the rules guiding the operations of publicly quoted companies. So the decision to increase its funds was taken to the company’s shareholders through a proposal which was presented at an extra ordinary general meeting (EGM) in 2008.
At that meeting the existing shareholders insisted that they must be given the opportunity to also participate in whatever issue that will be used to resuscitate the company, they (the shareholders) therefore demanded for rights issue instead of public offer. The objective is mainly to ensure that the shareholders who have suffered and stayed with the company when it was in comatose should be the first to benefit when things begin to turn around. This is the reason why we first did a private placement which enabled the core investors to bring in their money and now we are going ahead to do a rights issue which will now allow the existing shareholders of the company to partake in the resuscitation process. Who are these core investors?
They are a group of young professionals in various endeavors who are engaged various endeavours from the oil & gas sector, banking sector, entrepreneurs as well as in the Consulting Business. Some members of the team have participated in the turnaround of other companies before now. It is important to state here that some members of the core investors group are currently running their own businesses. I have been involved in several turnaround operations. So, with their pedigree, they came together to form a group to turnaround Interlinked. Company potentials
Well, our objective is to put together our experiences to boost the economy of the nation. We feel we can do better in the area of turning around organisations with potentials but have financial and managerial challenges. We believe that with considerable level of experience that we have at our disposal, we can turn around Interlinked Technologies plc so as to ensure that it contribute meaningfully to the economic growth of this country.
Don’t forget that the company has been playing a key role in the Energy and Power sector before the management started facing challenges in running the business. In our view, some of the problems the company entered into earlier were caused by poor investment decisions and financial pressures.
The hitherto management was faced with an overbearing debt burden as they were trapped in financial debt. To further complicate the issue, their efforts to increase capacity were hindered by the financial constraints created by the obligation of paying interest which continued to grow over time. On the whole, the debt situation became the main issue to contend with and unfortunately they were unable to overcome it.
Position of the debts now When we came in the debt issue was one of the first things we tackled. With the fund from our core investors, we quickly liquidated the debt. So we are now out of debts.
Financial prospect of the company We believe that with our experience and pedigree, we shall be able to turnaround the company and make it profitable in the shortest possible time. The target we gave ourselves was four years to be able to bring the company back to stable profitability. With our experience we believe that in the next four years, this company will be one the foremost engineering company in Nigeria in terms of reward to investors as well as contribution to the national economy. Leaving the red zone
As we stated in the rights circular, we believe strongly that by the end of the 2011 financial year, Interlinked should have gotten out of posting loses, and should then be able to reward shareholders in terms of dividend. Remember we have to expand and increase our capability on our products, manpower and factory. That is what we are doing currently. Key selling point to shareholders
Our key selling points include the following; one, we have gotten our own money, we have brought in well over N270 million and we hope that business is going to expand because we are not indebted to any company neither are we owning any bank.
Furthermore, the products that we have to offer are highly required for the development of the power and telecommunication sectors. We produce the raw materials that are required by every Power generating company whether you are operating in the private or public sector. As a matter of fact, we are convinced that we are the only company in the country that is capable of providing the power accessories needs. With the fresh funds we will be expanding into other higher forms of cable accessories. As I have said before we have promised our shareholders that they would soon start enjoying dividend regularly, as they join us to build this company together.
Are the core investors bringing in their own team? What we have done is that the core investors are coming with three new additional directors, of which one is my self who is the chief executive, another one will soon come on board as executive director. The previous managing director has now become chairman of the Company. We retained some experienced members of the Board to guide us on what has happened in the past.
We have recruited a number of new staff, we have recruited very experienced personnel in the industry, who we believe will enhance our ability to penetrate the market; this will help us realise our objective of reviving the company in the shortest time.
We are also trying to expand our reach; we have set up our Warri office, and we are about to set up our Abuja office. So we will be nationwide rather than be in only Lagos State. With that, we can increase the presence of Interlinked in the market.
Market share in oil and gas sector We believe that with the local content, we have a very good chance going by our presence in the market. We know that here, opportunity is there for any Nigerian company to be able to prove itself in terms of quality. Customers
Here we have NEPA Superannuation fund on our board but the major people we are doing business with in terms of government is PHCN for the fact that they are the largest users of power products. Also, we have corporate entities that we do business with like, Nestle, Shell, Chevron among others. We are also partnering with private organisations involved in building power plants. Our business is not dependent on Government only, we have clients across the nation, and construction companies are also part of them.