UPA (Utanian Press Agency)
Release: Friday, June 28th, 302 AP.
Belson Blue in Û300m Arvika deal
Belson Blue, Belson Corp's cellular telecoms business, announced today a Û300
million (C100m) deal with Arvika, the Vinnish cellphone manufacturer, to buy
300,000 Arvika-brand cellphones over the next three years.
Belson Blue, formerly Blue Telecommunications, or BlueTel, was bought by the
Belson Corporation in March this year. BlueTel was heavily indebted to the tune
of almost one billion punds and making losses over Û110 million a year, on
revenues of only Û344 million.
Belson Blue has since raised prices by up to 25%, is receiving Û600 million
this year to cancel debt from its parent company, and is looking at new ways to
reduce equipment costs.
Thus, today, new CEO Brian Kelp announced the company would be buying
cellphones almost exclusively from Arvika, the Vinnish telecommunications
giant. A similar deal is said to be in the wings for equipment purchases. Brian
Kelp took over as CEO in early April, replacing the hapless Joe Palermo.
For Arvika, it means their products getting exposure in the multi-billion pund
Utanian market, creating demand for the newer models, while Belson Blue get the
phones at least 10% below projected cost.
The deal runs from July 1st this year for three years.
Belson Blue is the fourth largest of nine cellular communications companies in
Utania. Based in Luka, with 380,000 subscribers, a mere 7.8% of the market,
Belson Blue is the smallest company with its own infrastructure, worth over
Û1.4 billion, a burden dragging the company deeply into the red. Without funds
to expand the technology base, the company had been stuck with a fixed number
Belson Corp. is hoping to pay-off the Û780 million investment in the company by
end-305ap, with a revitalised share price and substantial dividends. However,
it has not yet stated whether it intends to takeover the company completely
when it issues Belson Blue shares to itself that will push its ownership of
Belson Blue to almost 80%.
©UPA, 301 AP.
©Mike Ham, 2001. All rights reserved. No reproduction without, at least, tacit approval. ;-)