The Superloop (ASX:SLC) share price seesaws on successful capital raise

Superloop has raised $79 million in its institutional entitlement offer.

| More on:
Two boys happy at the top of see saws.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in Superloop Ltd (ASX: SLC) are up and down today after the company announced it has completed the first step of its entitlement offer.

While the Superloop share price spent most of the morning in the green, peaking 3.8% higher at $1.08, it dipped to $1.02 before midday then regained some ground in early afternoon trade. At the time of writing, the Superloop share price is $1.05 – 0.96% up from yesterday's closing price.

The institutional entitlement offer announced yesterday is the first step of the telecommunications and infrastructure company's $100 million capital raise.

Let's take a closer look at today's news from Superloop.

Successful start to the capital raise

Superloop's institutional entitlement offer, open to sophisticated and institutional investors, has seen it raise $79 million.  

The institutional entitlement offer involved 85 million Superloop shares sold for 93 cents apiece. That represents a 10.6% discount on the Superloop share price as of 4 June's close.

Both new and existing investors from Australia and overseas supported Superloop's institutional entitlement offer.

A retail entitlement offer – expected to raise around $21 million ­– will open next week.

The retail entitlement offer will see eligible Superloop shareholders able to purchase one new Superloop share for every 6.67 shares they hold as of 7pm tomorrow. Each share will cost existing investors 93 cents.

New acquisition

Superloop will use the cash raised to buy Australia's largest independent internet service provider, Exetel.

On top of the $100 million in cash, Superloop will pay $10 million worth of Superloop shares to purchase Exetel.

The acquisition will boost Superloop's customer base by 110,000 – leaving it with 155,000 customers.

Additionally, it will see the companies save a combined $5 million annually.

Once the companies are combined, Superloop's 2021 financial year earnings before interest, tax, depreciation, and amortisation (EBITDA) are expected to be 89% higher than last financial year.

Superloop share price snapshot

Superloop investors need all the good news they can get. Currently, the Superloop share price is down 0.94% from the start of the year, and 3.67% from this time last year.

The telecommunications company has a market capitalisation of around $384 million, with approximately 365 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended SUPERLOOP FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Communication Shares

Ordinary Australians waiting at the bus stop using their phones to trade ASX 200 shares today
Communication Shares

Telstra stock: Buy, hold, or sell?

What are analysts recommending investors do with this telco giant?

Read more »

A woman is excited as she reads the latest rumour on her phone.
Earnings Results

Guess which ASX 300 stock just reported a 21% jump in a critical measure

Growth is the word for this telco, and investors like what they see in the company's Q1 numbers.

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
Communication Shares

Under $4, do Telstra shares look an irresistible bargain?

Is this an opportunity calling too good to ignore?

Read more »

A couple makes silly chip moustache faces and take a selfie on their phone.
Broker Notes

Buy one, sell the other: Goldman Sachs rates 2 ASX 200 telco stocks

The top broker reveals its latest investment thesis on Telstra and a competing ASX 200 telco stock.

Read more »

a couple look dumbfounded with exaggerated looks of surpirse on their faces as te mman holds a phone in his hand.
Communication Shares

Could a special dividend be on the cards for Telstra shareholders?

Telstra could have an ace up its sleeve when it comes to its next dividend...

Read more »

A woman wearing a yellow shirt smiles as she checks her phone.
Communication Shares

It's a big day for Telstra shares, here's why

This telco giant is holding its AGM today. Here's what it has announced...

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Mergers & Acquisitions

TPG Telecom shares rise on $5.2b asset sale to Vocus

The telco is unlocking value by divesting assets. Here's what's happening.

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
Communication Shares

Why 7% of this fundie's portfolio is invested in Telstra shares

Telstra is an important stock for this fund.

Read more »