CityFibre Infrastructure Holdings, designer, builder, owner and operator of optical infrastructure in UK towns and cities, announced that it aims to raise minimum gross proceeds of GBP 185 million via a placement of shares at 55 pence per share in an offering that is fully underwritten by banks Citigroup, finnCap, Liberum and Macquarie,
CityFibre also intends to raise further proceeds through an accelerated bookbuilding process that will be launched immediately following this placing, and to raise further gross proceeds of up to GBP 15 million through a non-underwritten offer for subscription.
The company stated that the transactions are supported by new and existing shareholders including Woodford Investment Management, which has agreed to subscribe for 65,454,545 shares in the firm placing for a total consideration of GBP 36.0 million.
CityFibre stated that the net proceeds of the placing and the offer for subscription will be used to fund the expansion of its fibre network in the UK, including:
1. The expansion of its fibre metro networks from the current 42 towns and cities to at least 50 towns and cities by 2020;
2. The start of construction of FTTH networks for the residential market in five to ten UK towns and cities in 2018.
3. To support the company's strategy for wholesale fibre services and accelerate the commercialisation of its fibre assets, the acquisition of Entanet International, a provider of wholesale communications services, for approximately GBP 29 million in cash.
CityFibre noted that the fully underwritten firm placing involves 336,363,636 shares, representing approximately 126.6% of its existing issued ordinary share capital, to both existing and new institutional investors for gross proceeds of at least GBP 185 million. The placing may be increased through an accelerated bookbuilding process. The placing is to be made at 55 pence per placing share, representing a 9.09% discount to the closing price of 60.50 pence per ordinary share on July 4, 2017.
The non underwritten offer for subscription is expected to raise up to GBP 15 million, comprising up to 27,272,727 offer for subscription shares priced at 55 pence per share, and will be open to certain qualifying shareholders.CityFibre has applied to the London Stock Exchange for the new ordinary shares to be admitted to AIM, and it is expected that admission will become effective and dealings in the new ordinary shares will commence on or around July 28, 2017.
The acquisition of Entanet, which has approximately 1,500 channel partners, will expand CityFibre's wholesale capabilities and its relationships with service providers. By combining its fibre infrastructure with Entanet's wholesale products, systems and relationships with channel partners, CityFibre anticipates synergies of over GBP 3 million per annum within three years.
