TPG to raise $70m to pay off debt
- 02 February, 2010 12:40
TPG Telecom (ASX:TPM) is to go on a $70m capital raising path, via a share placement, to reduce the group’s net debt following the proposed $350m acquisition of Pipe Networks.
In an ASX statement the company also said it was also on track to achieve the financial year 2010 earnings guidance range announced at the company’s annual general meeting on 25 November 2009. It said it was looking to post an EBITDA of $140-$150m, and an net profit after tax of $52-$57m.
The company’s unaudited results for the five months ending 31 December 2009 were an EBITDA of $65m and net profit after tax of $22.5m.
In December last year, TPG announced it had secured the money it needed to go ahead with its merger with Pipe Networks (ASX: PWK).
In November, it was announced SP Telemedia - which changed its ASX listing from SP Telemedia's (SOT) in early December - would buy Pipe Networks for $6.30 per share and valued the latter's assets at approximately $373 million; a premium of 15 per cent on the company's volume weighted average price over the past three months prior to the announcement.
The news of the tie up created a wave of comment in the industry with many raising questions over how the operation will be run as SP Telemedia – which after a merger with TPG Holdings in 2008 has the retail brands of Soul and TPG – will gain access to wholesale assets.
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