TalkTalk to raise £200m to invest in full-fibre network for millions of UK homes

Company also trimmed its dividend and full-year 2018 core earning expectations

Book-building for the share issue will begin immediately (PA)

Broadband provider TalkTalk has said that it intends to raise £200m through a share placement, in a move designed to help it strengthen its balance sheet, support customer growth and build a full fibre network to service millions of homes across Britain.

The company on Thursday said that the book-building for the share issue would begin immediately. Each new share would be priced at 0.1p and the total number of newly placed shares would not exceed 19.9 per cent of the existing issued share capital of the company.

It also said that it had agreed terms with Infracapital, the infrastructure equity investment arm of M&G Prudential, to create an independent company. That company would build a full fibre network to service more than 3 million homes and businesses in midsized towns and cities in Britain.

Infracapital will provide 80 per cent of the funding to create the new company, while TalkTalk will foot the bill for the rest.

TalkTalk’s executive chairman and other directors have indicated their intention to participate in the share placing, up to an aggregate amount of £40m, 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, said.

“Looking ahead we see real opportunity to continue growing the core business while also investing in full fibre,” he added.

Separately on Thursday, TalkTalk provided an update on its financials, trimming its dividend and full-year 2018 core earnings expectations. It said that it now expects that figure to come in between £230m and £245m from a previous forecast of between £270m and £300m. It said that it had added 37,000 customers in the third quarter of its financial year.

“We said our priority for the year was growth and we are delivering it,” said Tristia Harrison, chief executive of TalkTalk.

“We will continue to make significant cost reductions as we radically simplify the business in line with the strategy we set out last year,” she added.