UK fiber to the home (FTTH) network operator CityFibre Infrastructure Holdings PLC says it plans to raise additional capital through the issuance of public stock. The company hopes to raise at least £185 million based on a stock price of 55 pence per share, fully underwritten by Citigroup, finnCap, Liberum, and Macquarie. It also plans to raise up to £15 million additionally through a non-underwritten offer for subscription. CityFibre plans to use the funds to expand its FTTH footprint as well as underwrite its purchase of wholesale communications services provider Entanet.
The 55 pence per placing share, represents a 9.09% discount to the closing price of 60.50 pence per ordinary share on July 4, 2017. CityFibre says the fund raising is off to a good start, with Woodford Investment Management Ltd. agreeing to subscribe for 65,454,545 shares, worth a total of £36.0 million, in the underwritten portion of the offer.
The fiber-optic network expansion plans include growth of CityFibre's metro networks from the present 42 UK locales to not less than 50 towns and cities by 2020, as well as construction of new FTTH networks in five to ten UK towns and cities during 2018. The company has several projects underway, with an eye toward gigabit service provision (see "CityFibre plans gigabit FTTP services in Glasgow"). Meanwhile the agreement to acquire Entanet, for £ 29 million in cash, will accelerate the company's strategy to offer wholesale fiber services. Combining CityFibre's fiber network infrastructure with Entanet's wholesale products, systems, and relationships with channel partners will enable synergies of more than £3 million annually within three years, CityFibre predicts.
"With Entanet now part of the CityFibre family, our combined offering will accelerate the take-up of services over our growing network footprints, leveraging Entanet's enviable channel partner network and continuing to transform digital connectivity for thousands of UK businesses," commented Greg Mesch, CityFibre's CEO. "Today's capital raising also better positions CityFibre to undertake larger projects coming forward with the public sector as well as mobile operators in readiness for their small-cell roll-outs and 5G services."
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