investment partnership, Gilbert Global Equity Partners, by telephone group, One.Tel Ltd.

The notes are convertible into ordinary shares at a conversion price of A$3.50 a share.

One.Tel shares closed at A$3.60 on Tuesday. After the conversion, Gilbert Global would own about 8.9 percent of One.Tel's fully diluted equity.

The convertible note has a term of five years with an annual interest rate of 8.25 percent.

"Gilbert Global's focus is to invest in the most attractive regions and investment sector and concentrate on under-served niches, thereby avoiding over-funded or over-heated investment areas,'' One.Tel said.

"The issuing of the note to Gilbert Global will provide One.Tel with considerable cash reserves to realise future opportunities in the Australian GSM mobile market and the global long distance market,'' the company said.