Netlinkz inks a reseller agreement with SpaceX to sell its Starlink satellite. Image: Getty.
Netlinkz launches $12 million cap raise to propel Starlinkz reselling opportunity
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- Netlinkz launches $12 million capital raise with sophisticated and institutional investors
- Cap raise will take the form of a second senior note facility with minimum $20,000 commitment
- Capital raise will be used to refund debt and fund projects including Starlink global reselling opportunities
Global network solutions vendor NetLinkz has launched a $12 million capital raise to restructure debt and fund its projects as it enters a “significant revenue and profit growth phase”.
Netlinkz (ASX:NET) inked a reseller agreement in November 22 with SpaceX to sell its Starlink satellite-based high-speed, low-latency broadband internet in 72 countries.
The deal created a direct channel to market for NET’s proprietary network solution called the Virtual Secure Network (VSN) as part of the broadband services.
NET says the VSN provides cybersecurity and enhance network performance as well as allowing remote access from anywhere in the world, without compromising security.
Currently, Starlink broadband does not provide cybersecurity to users and NET says the opportunity for its VSN to do so is a major opportunity for the company.
Other partnership opportunities
NET has also forged partnership arrangements with Hutchinson Global Communication (HGC) of Hong Kong, ALT Communications of Bangkok, Spark New Zealand, and PT&T of the Philippines.
The company says its second big opportunity is its partnership with (HGC) to deliver a Network as a Service (NaaS) offering to enterprises globally.
HGC is providing NET with 26 data centre locations around the world as well as access to all its optic fibre cable as the infrastructure to power the NaaS.
The NaaS is all VSN technology which NET has developed over the last 4 years.
NET says both HGC and Starlink are opportunities to market selling the VSN as part of a broadband solution to enterprises world-wide.
The company has generated $1 million in revenue in the June 2023 quarter selling Starlink.
Eight reasons enterprise customers buy VSN bundled with broadband
NET says there are eight reason customers will buy VSN bundled with broadband including:
1.It’s an encrypted invisible network that has never been breached or hacked.
2.VSN is delivered as a NaaS, which is a subscription-based service paid monthly or quarterly with no major capital expenditure of costs for users upfront.
3.VSN agnostic to the underlying infrastructure or cloud service.
4.An enterprise can use any cloud service, mix and match cloud services to suit their budget and corporate objectives.
5.VSN secures all devices and points in the network, while more importantly encrypting and securing all data transmission from device to device and fixed locations including the cloud.
6.ISO certification.
7.ESG friendly as being software, VSN is friendly to the environment and enables ESG points for the enterprise.
8.Performance. Unlike other network security solutions, VSN reduces latency significantly for a cloud-based network because it’s a single product – not a combination of many products including hardware bundled as SD WAN or SASSe.
Growing international presence
To take advantage of growing opportunities NET is establishing a significant presence in Thailand, the Philippines, Pakistan, Brazil, Houston, and Dubai to provide direct local and regional services to its global partner network and their enterprise customers.
The company says Thailand is becoming a manufacturing hub for Asia because of its low-cost base and easy access to ports.
NET says many global enterprises are shifting their manufacturing out of China to Thailand, including Foxconn, Apple, and Samsung.
Netlinkz is due to launch the NaaS with HGC in Thailand in October.
Cap raise to drive sales growth and refinance debt
NET says to consolidate and drive sales channels for both its VSN product and the high performance Starlink internet terminal the company seeks to raise funds to retire existing debt with replacement funding at attractive interest rates.
The funding will also be used as working capital including to fund expansion of its global Starlink satellite and NaaS business into Southeast Asia, MENA, South America, and other international markets.
The company says the decision to raise debt instead of equity is based on the low share price, which was driven by an institutional investor selling aggressively its position as part of a structured facility.
In May 2022 NET entered a loan facility of up to $10 million to be provided by Booker Super Services, a private company owned by non-executive director, Grant Booker.
NET has drawn down $3.2 million under the facility but has been informed by Booker that it won’t be able to provide additional funding under the facility and as such the facility will be terminated.
Furthermore, NET will retire short-term debt which was used to purchase Starlink satellite receptors which are now sitting as inventory of the company.
Note facility for sophisticated and professional investors
The capital raise will take the form of a second senior note facility with shareholders who are sophisticated and professional investors to raise up to $12 million.
There is a minimal commitment $20,000 and NET says the notes will pay a return of 18% per annum payable in cash quarterly in arrears.
Subscribers will be issued shares pro-rata to their commitment from a pool of 50 million shares at a deemed issued price of 1 cent/share. The offer is due to close on October 15.
This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
