ASX-listed internet services business Spirit Telecom is in front of investors seeking a $23 million equity injection.

The company's shares went into a trading halt on Tuesday morning as its broker Shaw and Partners rustled up buyers.

It is understood Spirit was seeking to raise $18 million in a placement of new shares and up to another $5 million from existing investors via a share purchase plan.

Funds raised would be used to buy a handful of small internet service providers. It is understood Spirit has agreed to pay $6 million cash and issue scrip worth $2 million for three IT services companies on Australia's east coast, leaving $4 million for marketing and investment and $11 million for future deals.

The raising was at 32¢ a share, which was a 13.5 per cent discount to the last close of 37¢.

The company had a $170.2 million market capitalisation prior to the raising.

The raising comes two weeks after Spirit Telecom told shareholders its revenue was up 14 per cent in the fourth quarter.

The offer is available to Australian Sophisticated and Professional Investors that are existing Spirit Telecom Limited shareholders only. 

Article source: AFR, 18 August 2020