AUSTRALIAN companies are being exhorted almost daily by the government to go out and discover Asia. So why is the Asian arm of Datacraft, one of the first Australian companies to head north, partly buying itself out? The answer, according to Datacraft Asia managing director Des Althorp, is that the intricate deal, which uses a mix of debt, equity and venture capital, is borne out of the different economic conditions in Asia and Australia. And it could be a model for other Australian companies in the same position. While many companies are desperate to retain control of their operations in the region - which may be the only growth area they have - Datacraft has realised the benefits of a more hands-off approach, he says. The deal also positions the company for flotation in Hongkong or Singapore in two or three years, Mr Althorp says. Datacraft Asia is a new company, headquartered in Hongkong, which has bought the six country subsidiaries from the Australian parent. Datacraft companies build data networks using a mix of their own and other people's equipment. The payment is partly in shares, leaving the Australians holding 74 per cent of Datacraft Asia, and partly in cash and venture capital, which is being provided by DBS Bank of Singapore and Transpac, a venture-capital company also based in Singapore. DBS is providing a loan and Transpac is taking shares for a deal worth around US$6 million, split about equally between the two. Mr Althorp said Hongkong financiers could not generate any enthusiasm for the deal. Datacraft has pulled cash out of the Asian subsidiary, which it can use in Australia where the economy appears to be picking up and where Datacraft needs to invest to get the benefit of the upturn. A separate value on the Asian operations, whose turnover has increased by 40 per cent a year and now rivals its parent in size, should also help Datacraft's share price in Sydney recover from its current rock-bottom level, which has stopped it turning tothe stock market for new funds. The company's historic price-earnings ratio has bumped along under five for most of the past 12 months. ''We had an unbalanced situation. We generate cash in Hongkong but with the recession ending Australia was short of cash,'' Mr Althorp said. The Asian subsidiary gets management independence but borrowed cash to pay the parent and now has to repay the loans. ''We believe we can grow at a realistic rate and still repay the debt,'' Mr Althorp said. ''We didn't have to give away the store.'' Less than five per cent of the cash raised has gone in professional fees, although Mr Althorp has spent half of the past six months working on the deal. It sounds the sort of deal that any subsidiary would be keen to pull. One problem appears to be that you may have to go to Singapore to find someone who can finance it, particularly if you are in a hi-tech business. The other is that venture-capital companies, as Mr Althorp observes, invest in people. While Mr Althorp has raised this type of funding before, first-timers may find it harder. You also need to persuade the head office it is a good idea. One reason that this deal went smoothly is that work had been done on a similar one four years ago, but was vetoed by headquarters.