Devonshire Capital
Bangkok Post October 10, 2001

Datamat regroups

Will focus on 3 key areas

Sasiwimon Boomruang

After successfully completing its debt restructuring for the past three years, local IT firm Datamat will move forward by concentrating on three major business areas.

According to Datamat president and CEO Manoo Ordeedolchest, the sectors that Datamat expects to succeed in are software services, system integration (SI) and application service provider (ASP) - three areas which he believes are complementary.

He noted that technology has been transformed by the network over the past three years, and as a result Datamat has adopted Java as its major platform.

Mr. Manoo said that the company would also expand into foreign markets with support from Devonshire Capital, the major shareholder of Cyber Venture which has a 64% stake in Datamat.

At present, its key customers are in the retail business, manufacturing, oil and gas and tourism, all of which are prospective clients for the three identified business units.

Meanwhile, Datamat subsidiary OCT will concentrate on selling Sun servers. OCT is now closely working with Datamat's SI business unit to boost training, especially in Java.

Before the recent restructuring, Datamat had 300 million baht in annual revenue. The new cash flow from investors is expected to help the company expand, according to Mr. Manoo, who said the company expected growth of some 70-80%.

During the first three years, the SI business will be the major revenue generator, with about 60% of its business.

Datamat is now preparing some 100 Java programmers to work on a project for a US partner.

Devonshire Capital Thailand's managing director Anake Pinvanichkul said Cyber Venture was considering adding additional strategic partners.

" We prefer to strengthen the business and then its value will show" said Mr. Anake, adding that this was the right time for Devonshire to invest in the IT business.

The business would become clearer when the debt repayment plan was closer to be finalized in about five years, said Mr. Anake.

Having faced business problems since the economic crisis in 1997, Datamat so far has restructured some 1800 million baht of debt. The company has also reorganized accordingly, going from 800 down to 280 employees.

In the past three years of debt reconciliation, Datamat has settled with its 12 creditors under the bank of Thailand's Corporate Debt Restructuring Advisory Committee (CDRAC) and another three creditors who did not apply to the CDRAC.

Under the process, creditors agreed to transform debt into capital, decrease some debt and interest as well as called for new shareholders. The remaining 600 million baht of debt will be paid within seven years, according to the contract.

Following the restructuring, Datamat will have in excess of 300 million baht in cash.

According to the new structure, Cyber Venture has a 64% stake, existing creditors have 18%, Asia Capital Advisor has 6% and the remainder belongs to the original shareholders.

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