<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 1998
OZEMAIL LIMITED
ACN 066 387 157
OZEMAIL CENTRE, 39 HERBERT STREET, ST. LEONARDS NSW 2065, SYDNEY, AUSTRALIA
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X* Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
--- ---
*As a foreign private issuer, OzEmail Limited ("OzEmail") is eligible to
file annual reports under cover of Form 20-F or Form 10-K.
<PAGE>
OZEMAIL LIMITED
FORM 6-K
1. SHARE EXCHANGE
--------------
On April 22, 1998, OzEmail Limited, an Australian corporation ("OzEmail")
through its wholly owned subsidiary, OzEmail Fax Investments Pty Limited, an
Australian corporation ("OzEmail Fax"), increased its ownership interest in
OzEmail Interline Pty Limited ("Interline") through a share exchange with
Ligapart AG, a Swiss corporation ("Ligapart"), which is a wholly owned
subsidiary of Metro Holding AG, a Swiss corporation ("Metro"), pursuant to an
Agreement for Sale and Purchase of Shares in OzEmail Interline Pty Limited by
and among Ligapart, OzEmail Fax, OzEmail and Ideata Pty Limited, an Australian
corporation. The consideration for the purchase consisted of an exchange of
approximately five million four hundred thousand (5,400,000) OzEmail ordinary
shares for Ligapart's ownership interest in Interline. The consideration for
the share exchange was determined by arms-length negotiation among the parties.
A copy of the press release announcing the Interline share exchange is attached
to this report and is incorporated herein by reference.
Interline is in the business of providing internet telephony service in
Australia. OzEmail intends to continue these operations.
2. OPTION TO ACQUIRE MAJORITY INTEREST
-----------------------------------
On May 8, 1998, OzEmail signed a binding Heads of Agreement with PowerUp
Pty Limited, a Queensland based internet service provider ("PowerUp"),
WebCentral Pty Limited, a Queensland based web hosting business ("WebCentral")
and the owners of those two companies (the "Agreement"). Under this Agreement,
OzEmail has an option to acquire and, subject to certain conditions, the sellers
have an option to require OzEmail to acquire fifty five percent (55%) of PowerUp
and WebCentral from July 1, 1998, in return for OzEmail's issuance of ordinary
shares of OzEmail plus six hundred sixty six thousand six hundred sixty six
Australian dollars (A$666,666) in cash. The total consideration is expected to
be two million Australian dollars (A$2,000,000). OzEmail also has an option to
acquire the outstanding interests of PowerUp and WebCentral after two (2) years;
if this option is not exercised within two and one half (2-1/2) years after the
transaction, the sellers have an opportunity to buy back OzEmail's interest. A
copy of the press release announcing this transaction, among other things, is
attached to this report and is incorporated herein by reference.
3. EXHIBITS
--------
The following documents are filed as exhibits to this report:
Exhibit 99.1 - Press Release, dated April 16, 1998, issued by OzEmail
------------
announcing the exchange of approximately 5,400,000 OzEmail ordinary shares
for Metro's ownership interest in Interline.
Exhibit 99.2 - Press Release, dated May 13, 1998, issued by OzEmail
------------
announcing, among other things, its option to purchase a majority interest
in PowerUp and WebCentral.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
OzEmail Limited
---------------
(Registrant)
Date: May 19, 1998 By: /s/ Steven Ezzes
--------------------------------
Name: Steven Ezzes
Title: Director, Authorized U.S. Representative
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
99.1 Press Release, dated April 16, 1998, issued by OzEmail E-1
announcing the exchange of approximately 5,400,000
OzEmail ordinary shares for Metro's ownership interest in
Interline.
99.2 Press Release, dated May 13, 1998, issued by OzEmail E-4
announcing, among other things, its option to purchase a
majority interest in PowerUp and WebCentral.
<PAGE>
EXHIBIT 99.1
[LOGO OF OZEMAIL APPEARS HERE]
NEWS RELEASE
OZEMAIL LIMITED REORGANISES INTERNET TELEPHONY
SUBSIDIARY TO EXPAND PRESENCE IN VOICE-OVER-IP
MARKET
Reacquires 40% stake in Interline from Metro Holding AG.
Announces Hyundai joins as Korean Interline affiliate.
Company moves headquarters to Silicon Valley to be closer to heart of
Internet Telephony development.
FOR MORE INFORMATION CONTACT:
Sean Howard Sydney, Australia (+612) 9433 2400
Todd Friedman San Francisco (415) 296 7383
SYDNEY, AUSTRALIA, APRIL 16, 1998 - OzEmail Limited (Nasdaq: OZEMY), one of the
leaders in the growing Internet telephony industry and the leading provider of
comprehensive Internet services in Australasia, has taken steps to strengthen
the market presence of its Internet telephony subsidiary - OzEmail Interline.
OzEmail announced today that it is exchanging approximately 5,400,000 OzEmail
Ordinary Shares for Metro Holding AG's 40% interest in Interline, increasing
OzEmail's ownership position in Interline to 88%. The stock consideration is
equivalent to 540,000 OzEmail Limited American Depositary Shares (which would
have had a value of approximately US$12 million at the close of market on April
15, 1998), representing approximately 4.5% of the expanded share equity of
OzEmail. OzEmail and Metro have agreed to work together to promote the Interline
Internet telephony products and services.
"Our new arrangement with Metro will enable us to direct our European affiliate
development efforts. The arrangements also provide for the distribution of
Interline products. We have been testing prepaid phone cards in Australia, and
Metro, as one of the biggest retailers in Europe, is the ideal partner to
distribute these cards throughout Europe," said OzEmail Chief Executive Officer
Mr Sean Howard in announcing the agreement.
OzEmail Limited (ACN 066 387 157), Level 1, 39 Herbert Street, St. Leonards
NSW 2065, Australia
Telephone: (612) 9433 2400 Facsimile: (612) 9906 5222
E-1
<PAGE>
News Release April 16, 1998
Ozemail Reorganizes Interline Subsidiary
- --------------------------------------------------------------------------------
OzEmail originally held an 80% equity interest in Interline. In June, 1997 Metro
purchased a 40% equity stake in OzEmail Interline 32% of which came from OzEmail
with the remaining 8% from Ideata Pty Limited, OzEmail's original partner in the
venture. As a consequence of the acquisition of the Metro stake, OzEmail's
interest in OzEmail Interline is now 88%. Metro was also granted an exclusive
licence to roll out the Internet telephony offering in Europe. OzEmail's
interest in the total cash consideration for the grant of the licence and the
sale of the equity was US$12 million. The exclusive licence has been terminated
as part of the current transaction.
As a consequence of the stock-based repurchase of OzEmail's 32% interest within
12 months of the selldown on 26 June, 1997 to Metro, and in order to comply with
SEC revenue recognition requirements, OzEmail is required to restate its second
and third quarterly filings as well as to restate its results within the 10-K.
This has the effect of reversing the one-off transactions associated with the
Metro arrangements in the second quarter filing of 1997. Due to the capital
nature of the restructuring the transactions have been reversed gross of tax. As
a result of these non-cash adjustments the previously reported unaudited net
income for the year to 31 December 1997 of AUS$2,988,000 has been restated to a
preliminary unaudited net loss of AUS$14,238,000. The unaudited loss per
American Depositary Share is A$1.31 (US$0.85) for the year ended December 31,
1997. Given the complexity of this restatement, the 10-K and the restated 10-Q
are not expected to be lodged with the SEC before the end of April.
"We have been very successful lining up Interline affiliates throughout the
Pacific Rim, including Mitsubishi Dream Train Internet in Japan and MagicTel in
Hong Kong said Mr Howard. "Today I am pleased to announce that Hyundai
Information Technology ("HIT"), one of the Hyundai group of companies, has
joined Interline."
HIT will exclusively market and sub-license Interline's telephony gateways to a
number of other Korean service providers to leverage their existing network
infrastructures.
"We have tested Interline Phone on both our domestic and international networks
and the results were very pleasing. Our testing focused on three areas of
concern in delivering a viable 'voice over the Internet' (VoIP) service: the
quality of voice, echo cancellation, and time delays in the transmission of
voice. It is difficult to satisfy each of these criteria - even in a
conventional phone system - but of all the VoIP technologies we tested, only
Interline Phone succeeded," said Mr. Taik-ho Kim, the President of Hyundai
Information Technology.
OzEmail Limited (ACN 066 387 157), Level 1, 39 Herbert Street, St. Leonards
NSW 2065, Australia
Telephone: (612) 9433 2400 Facsimile: (612) 9906 5222
E-2
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News Release April 16, 1998
Ozemail Reorganizes Interline Subsidiary
- --------------------------------------------------------------------------------
In order to work more closely with the major equipment manufacturers, OzEmail
also announced today that it is moving its Interline headquarters to Silicon
Valley. Sales and marketing personnel, along with some engineers, will be
opening an office in California shortly. The majority of OzEmail's research and
development staff will remain in Australia. OzEmail recently announced it is
teaming with Cisco Systems, Inc. (Nasdaq:CSCO) to facilitate the global
deployment of Internet telephony gateways, roaming authentication and settlement
services. "The leading companies in this industry -Cisco, Bay Networks and
Ascend, to name a few - are all based in Silicon Valley," said Chief Executive
Officer, Sean Howard. "Opening an office there will enable us to take advantage
of the intellectual capital that can be found in the region as we continue to
staff the office at all levels."
Interline is a service provider to an international consortium of Internet
telephony service providers. Built on technology developed by OzEmail, the
Interline VoIP solution provides a robust, secure Internet telephone routing
network with a central billing and settlement system. By removing the key
obstacles to delivering VoIP services - technology investment, voice quality,
international termination agreements, billing and settlement disputes -
Interline makes it easy for ISPs to begin delivering international VoIP
services.
OzEmail is the leading provider of comprehensive Internet Services in
Australasia. The Company's Internet services are designed to meet the different
needs of its residential and enterprise customers ranging from low cost dial up
to high performance, continuous access services integrating the Company's ISDN
offering and consulting expertise.
Certain statements made herein that are not historical are forward-looking
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements may differ materially from actual future events or results. The
future performance of the Company involves risks and uncertainties that could
cause actual results to differ markedly from those anticipated by such forward-
looking statements. Such risks include but are not limited to the following: a
limited operating history for the Company; potential fluctuations in operating
results; competition; pricing pressure; dependence on third-party suppliers of
hardware and software; shortage of modems; dependence on telecommunications
carriers; management of growth; limited market; a need for and risks of
international expansion; the existence of a new and uncertain market; customer
retention issues; rapid technological change; security risks; the risk of system
failure; formal licensing and joint marketing agreements; patents and
proprietary rights; infringement claims; changes in government regulation; risks
associated with providing content including potential liability; dependence on
key personnel and need to hire additional qualified personnel; uncertainty of
currency exchange rates; need for additional capital; enforceability of civil
liabilities; antitakeover impact of Australian foreign investment restrictions;
control of the Company by the Board of Directors; and possible volatility of ADS
price. For a more complete description of certain of such risks and
uncertainties, we refer you to the documents that the Company has filed from
time to time with the Securities and Exchange Commission ("SEC") including its
registration statement on Form F-1 dated May 28, 1996, its 1996 Form 10-K dated
March 31, 1997, and its Form 10-Qs dated August 13, 1996, November 14, 1996, May
8, 1997, August 13, 1997, and November 14, 1997.
OzEmail Limited (ACN 066 387 157), Level 1, 39 Herbert Street, St. Leonards
NSW 2065, Australia
Telephone: (612) 9433 2400 Facsimile: (612) 9906 5222
E-3
<PAGE>
EXHIBIT 99.2
- ---------------------------------------PR NEWSWIRE INVESTORFAX
OzEmail Reports First Quarter Results
Announces purchase of Brisbane ISP and Web Hosting Business and
Addition of Three New Interline Affiliates.
Sydney, Australia, May 13, 1998. /PRNewswire/ -- OzEmail Limited
(Nasdaq: OZEMY), the leading provider of comprehensive Internet services in
Australasia, today released its results for the first quarter ended March 31,
1998.
Revenues for the first quarter of 1998 were A$22,032,000
(US$14,550,000), an increase of 104.9% over 1997 first quarter revenues of
A$10,752,000 (US$8,434,000). The growth in revenues is primarily attributable to
the November 1997 acquisition of Access One and increased residential and
enterprise revenue from OzEmail's Australian Internet connectivity business.
During the quarter, OzEmail realized recurring savings of approximately
A$750,000 related to fixed telecommunications charges. These savings were offset
by an increase in operating expenses related to the ongoing product development
and marketing of the Company's Interline Internet telephony business. As a
result of these expenses, the loss before interest, taxation, depreciation and
amortisation for the first quarter of 1998 was A$923,000 (US$610,000), compared
to earnings before interest, taxation, depreciation and amortisation of
A$427,000 (US$335,000) for the first quarter of 1998. The net loss for the
quarter was A$4,271,000, or A$0.38 per share (US$2,821,000 or US$0.25 per share)
compared to a net loss of A$316,000 or A$0.03 per share (US$248,000 or US$0.02
per share).
"We strengthened our core Internet business in the quarter with the
purchase of Camtech Internet Services and the integration of our Access One
purchase," said OzEmail Chief Executive Officer Sean Howard. "With our growing
number of subscribers, recently announced flat rate pricing and cost-reducing
satellite and cable agreements, we remain strongly positioned as the leading ISP
in Australia. I am also pleased to announce today that the Company has entered
into a definitive agreement to acquire a majority interest in PowerUp Pty Ltd,
Brisbane's largest ISP and the operator of WebCentral Pty Ltd, one of
Australia's largest web hosting businesses."
The consideration for the purchase is approximately A$2 million, with
the exact terms of the transaction subject to due diligence and completion
within the next three months. As part of the agreement, OzEmail has taken first
option over the remaining share of the business, the terms of which are subject
to performance targets. The principals of PowerUp and WebCentral will retain
management responsibility with OzEmail supporting the expansion of the hosting
business nationally through its extensive sales teams and internationally.
OzEmail's Internet telephony business -- Interline -- today announced
that it has signed affiliates in the Netherlands, People's Republic of China and
South Africa. The consortium of Interline affiliates recently met in Sydney for
three days, with representatives of more than 22 countries attending. During the
quarter, OzEmail repurchased the 40% ownership in Interline from Metro AG to
regain direct control over the management of the Interline affiliates.
(more)
E-4
<PAGE>
-2-
"These affiliate additions and strategic moves in the quarter
demonstrate our strategy to continue expanding the Interline business to take
advantage of the rapidly developing Internet telephony market," added Mr.
Howard.
Other recent highlights include:
* Launch of "OzMegaSaver" plan with flat rate pricing of A$44.95 per
month
* Introduced category-based search facility with ANZWERS LookSmart
partnership
* Launch of online music market with Chaos MultiMedia
* Introduced online company and land title searches with Australian
Business Research
In this news release, references to "US$" are to United States dollars
and references to "A$" are to Australian dollars. Amounts for quarterly results
and full year results are translated into US$ for convenience at the exchange
rate prevailing at the end of each quarter and at the end of each full year,
respectively. The exchange rates between the U.S. dollar and the Australian
dollar were $0.7844 and $0.6604 (expressed in U.S. dollar / Australian dollars)
at March 31, 1997 and 1998, respectively.
About OzEmail
OzEmail is the leading provider of comprehensive Internet services in
Australia. The Company's Internet services are designed to meet the different
needs of its residential and enterprise customers ranging from low cost dial up
to high performance, continuous access services integrating the Company's ISDN
offering and consulting expertise.
Certain statements made herein that are not historical are forward-
looking within the meaning of the Private Securities Litigation Reform Act of
1995. These statements may differ materially from actual future events or
results. The future performance of the Company involves risks and uncertainties
that could cause actual results to differ markedly from those anticipated by
such forward-looking statements. Such risks include but are not limited to the
following: a limited operating history for the Company; potential fluctuations
in operating results; competition; pricing pressure; dependence on third-party
suppliers of hardware and software; shortage of modems; dependence on
telecommunications carriers; management of growth; limited market; a need for
and risks of international expansion; the existence of a new and uncertain
market; customer retention issues; rapid technological change; security risks;
the risk of system failure; formal licensing and joint marketing agreements;
patents and proprietary rights; infringement claims; changes in government
regulation; risks associated with providing content including potential
liability; dependence on key personnel and need to hire additional qualified
personnel; uncertainty of currency exchange rates; need for additional capital;
enforceability of civil liabilities; antitakeover impact of Australian foreign
investment restrictions; control of the Company by the Board of Directors; and
possible volatility of ADS price. For a more complete description of certain of
such risks and uncertainties, we refer you to the documents that the Company has
filed from time to time with the Securities and Exchange Commission ("SEC")
including its registration statement on Form F-1 dated May 28, 1996, its 1996
Form 10-K dated March 31, 1997, and its Form 10-Qs dated August 13, 1996,
November 14, 1996, May 8, 1997, August 13, 1997, and November 14, 1997.
(more)
E-5
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-3-
OzEmail Limited
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
1997 1998
Net revenues A$10,752 A$22,032
Costs and expenses:
Cost of revenues - network
operations and support 3,166 5,934
Cost of revenues -
communications and other 3,447 9,566
Sales and marketing 2,759 4,758
Product development 1,671 1,516
General and administrative 1,442 4,239
Amortization of goodwill and
other intangibles -- 1,130
Total costs and expenses 12,485 27,143
Income (loss) from operations (1,733) (5,111)
Other income (expense):
Foreign exchange loss 4 (85)
Interest income 555 498
Other income, net 941 141
Interest expenses (11) (176)
Income (loss) before provision for income
taxes and minority equity interest (244) (4,733)
Income tax benefit (expense) (72) 462
Less: Minority equity interest -- --
Net loss (316) (4,271)
Basic loss per ADS A$ (0.03) A$ (0.38)
Diluted loss per ADS A$ (0.03) A$ (0.38)
Basic loss per Ordinary Share A$(0.003) A$ (0.04)
Diluted loss per Ordinary Share A$(0.003) A$ (0.04)
Weighted average Ordinary Shares
and share equivalents
basic 103,500 114,072
diluted 103,500 114,072
(more)
E-6
<PAGE>
-4-
OzEmail Limited
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
December 31, March 31,
1997 1998
ASSETS
Current assets: A$51,614 A$37,351
Cash and cash equivalents
Accounts receivable - trade,
net of allowances of A$889
and A$1,470, respectively 8,427 17,188
Receivable from shareholder 32 --
Other receivables 2,331 2,424
Other current assets 2,520 2,444
Total current assets 64,924 59,407
Plant and equipment, net 27,179 26,837
Non-current investments 1,559 1,535
Goodwill and other intangibles 19,839 21,799
Net deferred tax assets 285 903
A$113,786 A$110,481
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable A$ 19,936 A$ 24,222
Due to shareholder -- 3
Deferred consideration 4,407 4,407
Current portion of financing -
lease liability 3,836 4,575
Current portion of financing -
short term loan 2,043 2,043
Accrued expenses and other liabilities 7,513 2,792
Deposits under agreements with Metro 18,686 18,686
Income taxes payable 3,776 3,932
Total current liabilities 60,197 60,660
Non-current portion of
financing - lease liability 4,423 3,913
Total liabilities 64,620 64,573
Commitments and contingencies (Note 8)
Shareholders equity
Ordinary Shares, A$0.004 par
value; 1,250,000,000 shares
authorized: 111,000,010 and
115,436,250 shares issued and
outstanding, respectively 444 462
Additional paid-in capital 64,636 68,495
Retained losses (15,916) (20,187)
Dividends -- (2,858)
Cumulative foreign currency
translation adjustment 2 (4)
49,166 45,908
A$113,786 $A110,481
SOURCE OzEmail Limited
-0- 05/13/98
/CONTACT: Sean Howard - Sydney, Australia, 612,9433-2400, or Todd
Friedman - San Francisco, 415-296-7383, both of OzEmail Limited/
(OZEMY)
E-7
