Telecommunications company, TPG Telecom (ASX:TPM), has launched a fully underwritten institutional placement to raise $300 million.
According to the company, the fully underwritten placement of fully paid ordinary shares to institutional investors in Australia and in certain overseas jurisdictions will raise $300 million. The placement price per new share is to be determined via a bookbuild process.
This follows the company’s successful completed acquisition of iiNet in September 2015, for which a number of debt facilities were established to fund the cash consideration paid to iiNet’s shareholders and refinancing iiNet’s existing debt arrangements.
As announced at TPG’s FY’15 results, TPG’s bank debt rose to $1.85 billion following completion of the iiNet Acquisition.
TPG said, in a statement on the ASX, that the net proceeds of the placement will be used to partly repay the acquisition debt in order to support ongoing growth CAPEX initiatives (including the recently announced significant fibre network build for Vodafone Hutchison Australia) and to minimise its overall cost of funding.
It added that its operations, including the integration of the iiNet acquisition, are proceeding as expected. In addition, it claimed the placement is not expected to have a material impact on TPG’s FY16 earnings per share.
The new shares to be issued under the placement is to be ranked equally with existing TPG fully paid ordinary shares on issue and are expected to be allotted on November 18.
In addition to the placement, a non-underwritten share purchase plan will be offered to eligible shareholders in A/NZ. Under this share purchase plan, holders of existing TPG shares on the TPG share register and eligible shareholders in the region will be invited to subscribe for up to $15,000 of new fully paid ordinary shares in TPG per eligible shareholder.
The share purchase plan will not be underwritten and participation in it will be optional. Further information will be outlined in a separate SPP Booklet, which will be despatched to eligible shareholders.
The securities of TPG Telecom have been placed in trading halt at the request of the company until November 12.