8Telecom International Holdings said yesterday it aims to secure exclusive rights from the Chinese government to design and build telecommunications pipe networks in several provincial cities and towns in China.

It then intends to sell or lease these networks to telecom operators and government authorities, CEO Ye Tian Yun said at a news conference on the company's initial public offer (IPO). The IPO, which opens today, comprises 120 million shares at 30 cents each, of which 18 million are vendor shares. Some three million shares will be sold by way of public offer and the remainder by placement, including three million Internet placement shares. The IPO shares represent 25% of the group's enlarged share capital and were priced at 8.8 times its FY03 earnings.

Zhejiang-based 8Telecom expects to raise net proceeds of $27.4 million from the offer, of which $6.6 million will be used to fund its business relating to the sale or lease of the China telecom pipe networks. About $7.9 million will go towards building the second stage of a new manufacturing plant in Hangzhou and $4.7 million will be used to buy machinery for existing manufacturing facilities. These plants produce the wired telecom pipes.

8Telecom won the rights to install a telecom pipe network in Yuhang District, Hangzhou in October last year and says it is confident of securing the rights for several more cities. The rights are exclusive for 20 years. Besides providing telecom engineering services, the company designs, makes and installs telecom and other towers. Its major customers include China Unicom, China Telecom and China Mobile.