Estonian telecommunications company Levikom have announced plans to raise capital in the amount of more than €5 million through a bond emission targeted at local investors. Levikom have recently focused on the development of 5G technology, and the additional capital is to be put towards the company's business plan for the next few years.
Levikom said on Wednesday that they are planning to raise additional capital in two stages. The first stage is made up of bonds worth €2 million, to be emitted through Nasdaq CSD, and with a running time of two years.
The bonds won't be offered publicly. Instead, some 150 local investors are being asked to invest.
The company is planning to put the additional capital towards its plans to further develop 5G and IoT (Internet of Things) solutions. Levikom has recently been in the media for its very vocal criticism of the government's plans to auction off 5G frequencies only to Estonia's main telecommunications providers, cutting out smaller businesses working on the same technology.
The second stage of the bond emission, to start in 2020, will be public, when Levikom will have its bonds listed with Nasdaq First North. The press release didn't specify interest rates or other details.
Levikom planning to go public within next three to five years
The second stage will also include convertible bonds. This pre-IPO step aims at raising another €3-5 million, based on Nasdaq First North or Nasdaq Baltic.
The next step after that is to move towards an initial public offering (IPO) within the next three to five years to give institutional investors the option to join as well.
According to Levikom's CEO, Toomas Peek, there are some 162,000 homes in Estonia still not equipped with fast Internet connections. This means that there is demand for Levikom's services as an Internet provider. The company will use the new capital raised in the first round to invest in this line of business further, but also to go on developing its 5G and IoT products.
Talks with potential large-scale investors to continue
In addition to the bond issue and medium-term plans, Levikom is also talking to potential large-scale investors, Peek said. Levikom's shareholders have so far invested some €5 million in the development of the company, but in order to go on developing the still new 5G technology and the Internet of Things, more funding is needed.
"That's why we're in negotiations with additional large-scale investors, who would make it possible for us to grow even more," Peek added.
Editor: Dario Cavegn