UK operator CityFibre is planning to place GBP 200 million in a share offering to further its network expansion plans. The company will sell GBP 185 million worth of shares at 55 pence each, underwritten by Citigroup, finnCap, Liberum and Macquarie, and raise another GBP 15 million through a non-underwritten offering.
The company said it has received support from new and existing shareholders, including Woodford Investment Management, which has agreed to subscribe to over 65 million shares for GBP 36.0 million. With the money, CityFibre will boost its infrastructure and continue putting its focus on wholesale fibre services, namely with the acquisition of business ISP Entanet, for GBP 29 million in cash.
Under the plans, CityFibre will expand its fibre metro networks to at least 50 towns and cities by 2020, from the current 42. In addition, the company is moving beyond its initial focus on wholesale and enterprise networks to start construction of FTTH for the residential market in 5-10 towns and cities during 2018.
The company said its announcement follows CityFibre's successful participation in the FTTH trial in York. The trial demonstrated strong demand from ISPs and consumers for gigabit speed FTTH services, and showed the commercial viability of FTTH in the UK. CityFibre is now in advanced negotiations with ISPs that will market full-fibre broadband services to consumers, deployed over its networks.
The acquisition of Entanet, with its 1,500 channel partners at end December, is expected to substantially increase the company's wholesale capabilities and its relationships with service providers, extending its channels to market. The company sees over GBP 3 million worth of synergies per year, within the coming three years.
