Fresh from its solid 2020-21 performance, Aussie Broadband (ABB) has revealed plans to raise new capital – said by media reports to be as much as $120 million – to finance further expansion.
The company asked for a trading halt on Tuesday, telling the ASX that the request was ahead of a capital raising.
In the statement, the company it said it “is in the process of making and finalising arrangements in relation to a potential capital raising.
“The trading halt is requested until an announcement is made to the market in relation to the outcome of the proposed capital raising or the commencement of trading on Thursday, 9 September 2021, whichever is earlier.”
Media reports said the regional Victoria-based telco is looking to raise about $120 million.
On Monday Aussie Broadband announced a deal with Victorian Rail Track (VicTrack) to swap access to their respective fibre networks.
VicTrack will give Aussie Broadband access to its fibre network that extends a long way into regional Victoria—all the way to Warrnambool in the west and Traralgon in the east.
VicTrack will get access to Aussie’s more metropolitan network, and Aussie will build access for VicTrack at its NBN points of interconnect at a cost of $1.4 million.
The deal will give Aussie Broadband the ability to deliver business-grade broadband in regional cities.
The Victorian deal is for 10 years with two additional 10-year options (meaning up to 30 years). VicTrack is a business enterprise of the Victorian Government and operates the state’s fibre assets.
In its annual results released in late August, ABB revealed that and 84% jump in revenue to $350.3 million which was also 3.6% better than the prospectus forecast for the IPO.
Earnings before interest, tax, depreciation and amortisation, (before IPO expenses) of $19.1 million was up 433% on the previous year and was 55% ahead of prospectus forecast. The company ended the year with 400,848 total broadband services, up 53% on 2019-20.
The shares rose 7.7% on Monday to $4.63, the highest price they have been since floating in October 2020.
