Group plans to raise £200m to invest in a network of fibre cables
Shares in telecoms firm TalkTalk tumbled 16 per cent after the firm warned that profits would be significantly lower this year and it would also cut its dividend.
The FTSE 250 company expects its profits to be between £230m and £245m this year, which is much lower than the forecast made in November — between £270m and £300m.
Meanwhile, the group also announced plans to raise £200m by selling shares on the stock exchange to invest in a network of fibre cables that would allow much higher broadband speeds. Each new share would be priced at 0.1 pence and the total number of newly placed shares would not exceed 19.9 per cent of the existing issued share capital of the company.
According to reports, Infracapital will provide 80 per cent of the funding to create the new company, while TalkTalk will foot the bill for the rest.
The placing will be used to “strengthen the company’s balance sheet, to support its continued customer growth and its investment in its long-term FTTP (fibre to the premises) plans”, the company said.
“By signing heads of terms with Infracapital we are making good progress towards putting TalkTalk at the heart of Britain’s fibre future by building a full fibre network, bringing faster, more reliable internet to millions of homes and businesses,” Charles Dunstone, executive chairman of the group, told media, adding: “Looking ahead we see real opportunity to continue growing the core business whilst also investing in full fibre.”