Less than a year after listing, local telco Aussie Broadband is raising $120 million to accelerate product development and support new opportunities.

The company has tapped Shaw and Partners wholesale team, led by Tony Davis, to manage the raising.

The raising will take the form of a $110 million placement to institutional investors and a $10 million share purchase plan.

Priced at $4 per share, it comes at a 13.6 per cent discount to its last closing price. Bids are due by 3pm on Tuesday.

Findex is on board as the company’s financial advisor.

The stock has been a big winner for investors since it listed in October last year with an issue price of $1 per share.

Since then, it has consistently traded up, fetching a record high of $4.79 this month.

The announcement of the capital raise on Tuesday came on the back of Aussie Broadband shares soaring almost 8 per cent on Monday, after it announced a 10-year deal (with two extension options) with Victorian Rail Track, to swap access to their respective fibre networks. The swap significantly increased the reach of Aussie Broadband’s network in Victoria.

The company is also in the process of deploying a 1200 kilometre dark fibre network connecting into 78 of the National Broadband Network’s points of interconnect. This is expected to be completed in the 2022 financial year.

This network is expected to generate $15 million of earnings before interest, tax, depreciation and amortisation improvement from the 2023 financial year.

In its most recent results, Aussie Broadband revealed revenue was up 84 per cent to $350.3 million in the 12 months to June 30. The number of broadband services it was providing increased 53 per cent to 400, 848.

In the period its EBITDA before IPO costs increase 433 per cent to $19.1 million. 

Residential is by far its largest market, contributing $305 million of revenue, while its business customers generated it $45.2 million in revenue.

It also provides mobile services to 25,606 people.

Article source: AFR, 7 September 2021