Bevan Slattery-founded internet infrastructure provider Superloop (ASX: SLC) has seen its share price rise today on the news that divestments of Hong Kong and Singaporean assets have been completed.
Superloop, which will walk away with $125 million in cash from the sales, is trading up more than 5 per cent to $0.94 per share.
The company offloaded Superloop Hong Kong and select assets from Superloop Singapore to Columbia Capital and DigitalBridge Investment Management for $140 million in a deal announced in October last year.
“This successful sale is a significant next step in our three-year turnaround plan aimed at simplifying the business to focus on core markets of scale,” Superloop CEO and managing director Paul Tyler said.
"This divestment, at a 30 per cent premium to the carrying value of the associated assets, strengthens our balance sheet and opens up new pathways for growth.
"Our intent remains to deploy this capital to grow the business, across all three market segments as a challenger.”
Tyler added the $125 million builds on the company’s “significant net cash position”, which will enable the company to consider investment in growth and M&A opportunities. As of 31 December 2021, Superloop had $16.9 million cash.
The group also provided a brief quarterly trading update, highlighting Superloop’s “continuing organic growth momentum” in all customer segments, reaffirming full year EBITDA guidance of $23 million to $25 million.
“Demand for Superloop’s business solutions, including mid market and enterprise connectivity, SD-WAN, managed WiFi and security products such as SASE, is now returning post the Covid period headwinds as demonstrated by recent new contract wins including Penske, Ixom, ATB Moreton, KordaMentha, Coates and Cedar Pacific,” Superloop said.
“Momentum in the other segments was similarly pleasing with Q3 seeing the consumer segment deliver its strongest-ever net subscriber growth and wholesale Connect customers ending the quarter at in excess of 16k subscribers.”
Shares in SLC are up 5.62 per cent to $0.94 per share at 2.41pm AEST. Zooming out however, shares in the company are down around 27 per cent from the $1.29 per share price achieved when Superloop announced the two divestments completed today.
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