USIT World, the international student travel company founded in Ireland, stands to make £3.7 million (€4.7 million) from the planned stock market flotation of an Australian Internet travel company next month.
USIT World is a 26.8 per cent shareholder in travel.com.au, an Internet travel agent that went online only 18 months ago. The forthcoming listing is expected to raise Aus$23.5 million (€14.3 million), valuing the company at around $52.3 million. USIT World's share of travel.com.au will then be valued at around $14.02 million (€8.5 million). Mr Gordon Colleary, chief executive of USIT World and chairman of the Sunday Tribune, sits on the board of travel.com.au, along with Belgian, Mr Angel Olivares, chief operating officer of USIT World. Mr Colleary was not available for comment this week and USIT World played down its involvement in travel.com.au, saying the deal was being conducted through USIT Australia, an independent company and merely an affiliate of USIT World.
However, travel.com.au details USIT World in its pre-flotation prospectus available on the website. "The board is complemented by the international student travel skills of USIT World, a 26.8 per cent shareholder of travel.com.au and the commercial and business acumen of the non-executive chairman and other independent director," it says.
A spokeswoman for USIT World said it was aware of USIT Australia's plans and was expecting a final report on the planned placement this week. A Dublin-based corporate finance house is advising USIT World on the flotation.
Industry observers consider USIT World's entry into the Internet arena a shrewd strategic move because of the current consolidation that is going on within the industry. More and more consumers are ignoring the traditional middleman represented by the travel agent and booking their holidays directly online.
It is gradually emerging that the companies most likely to survive in the new order will be those that can offer niche travel services. USIT World's expertise in securing "back of the plane" seats at budget rates makes it an attractive prospect for young Internet surfers looking for cheap travel deals.
One observer said: "USIT is turning into a bit of a swan as the airline industry consolidates. It already has one in every 100 British Airways seats worldwide, with expertise in organising volume into the back of planes."
The existing shareholders are selling 44.9 per cent of the company through an offering of 18.8 million shares valued at $1.25 each. These are expected to be split evenly between institutional and retail investors.
travel.com.au has forecast its revenues to rise from $18.6 million last year to $38.1 million this year and $102.2 million in 2000. Over the same period the financial forecasts are for losses, including a $2.7 million net loss this year and a $4.9 million net loss in 2000.
