NETSOL TECHNOLOGIES’ WHOLLY OWNED PAKISTAN SUBSIDIARY, NETSOL TECHNOLOGIES LTD., GETS APPROVALS FOR
NetSol Anticipates Completing a $6.0 Million IPO as AKD Securities Leads Underwriting and Placement of the IPO
[ClickPress, Thu Jun 09 2005] Calabasas, CA – June 9, 2005 – NetSol Technologies, Inc. (NASDAQ:NTWK), a developer of proprietary software applications and provider of information technology (IT) services, today announced that it has received approval of its prospectus by Karachi Stock Exchange (KSE) to place an IPO of $6.0 million, which includes a $1.6 million private placement that was finalized in March 2005. Additionally, the company expects approval by the Securities and Exchange Commission Pakistan (SECP) any day now and anticipates finalizing the listing by end of its fiscal 2005 year.
As previously announced, NetSol Technologies retained a leading Pakistani brokerage and investment banking firm, AKD Securities, to list its wholly owned subsidiary, NetSol Technologies, Ltd., on the KSE. A substantial due diligence and assessment was carried out by AKD in order to underwrite the IPO. AKD is the primary underwriter with four large banking institutions participating with AKD.
NetSol reported revenue growth of 54 percent when comparing fiscal 2003 to 2004, and revenue growth of 93 percent when comparing fiscal 2004 to estimated revenue of $11 million for fiscal 2005 ending June 30, 2005. In addition to the substantial revenue growth, NetSol has reported three consecutive profitable quarters and expects to continue increasing its net income. NetSol has carefully evaluated its growth strategy, both organic and through acquisition, which led to the decision to raise additional funds through the listing of its wholly owned subsidiary on the KSE. This initiative will provide NetSol significantly more visibility and access to emerging capital markets to support its growth strategy.
”We have been working diligently on the IPO of our Pakistan-based subsidiary for over six months now and are waiting for final approval from the SECP for the completion of this initiative,” commented NetSol Technologies Chairman Najeeb Ghauri. “In the last three years the KSE has emerged as one of the most bullish and positive growth markets, growing from 1,100 points nearly three years ago to over 10,300 points in March 2005. Although the market in Pakistan is going through an expected correction cycle, the Morgan Stanley Index indicates that the KSE has outperformed every other stock exchange in South Asian markets.
“We are pleased to be working with NetSol management and advising them through the IPO process,” said AKD Securities Chairman Aqeel Karim Dhedhi. “NetSol has surprised us by exceeding our earnings estimates over the last three quarters, which has assisted us in securing several premium institutions to assist in underwriting the total IPO. We are very optimistic not only of NetSol’s prospects but of the success of the IPO.”
Dhedhi continued, “The Pakistani stock markets have recently undergone some corrections and the KSE is now trading around 7,300 points. However, we believe the markets have stabilized and have a tremendous appetite for new technology-based IPOs. The standard IPO on the KSE is traditionally priced at Rs.10, but AKD has priced NetSol’s IPO at Rs. 25, a 150 percent premium. The IPO shares being offered represent approximately 27 percent of the common stock of NetSol Technologies, Ltd.”
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