Brisbane-based connectivity services company Superloop (ASX: SLC) has seen its shares rise by more than a fifth this morning after striking a deal to sell its Hong Kong subsidiary and certain assets in Singapore for $140 million.
The binding agreement represents a 30 per cent premium to the $108 million carrying value of the assets involved in the sale, which will go to funds affiliated with Columbia Capital and DigitalBridge Investment Management, the investment management arm of DigitalBridge Group Inc (NYSE:DBRG).
In connection with the sale, Superloop will maintain operations in Singapore and Hong Kong and enter into a 15-year Indefeasible Right of Use (IRU) on the existing or future expanded Singapore and Hong Kong networks.
The company notes this will allow it to continue to participate in these markets and provide end-to-end connectivity services to Superloop’s INDIGO submarine cable (INDIGO) customers in the region.
"I recognised when I joined Superloop that one of our great opportunities was to look at the invested capital of the business and where appropriate, recycle it and re-invest in areas that will drive greater shareholder returns," says Superloop CEO and managing director Paul Tyler.
"This sale of our Hong Kong business and select Singapore assets, at a premium to their carrying values, allows the company to release significant shareholder funds and redeploy them into more strategically aligned assets, higher growth opportunities and markets."
Under the terms of the agreement, Columbia Capital and DigitalBridge will become a strategic partner to Superloop and will work with Superloop to drive incremental traffic on INDIGO with a preferential supply agreement.
Superloop will also continue to operate and support the Singapore network under various services agreements for Columbia Capital and DigitalBridge.
"We are delighted to be working with Columbia Capital and DigitalBridge, both of which are global leaders in digital infrastructure," Tyler adds.
"This partnership will provide opportunities to work more closely to monetise our international assets and leverage our respective infrastructures and complementary customer base."
SLC shares were up 21.13 per cent at 12:08pm AEDT to reach $1.175 each, representing a $99 million lift in the company's market capitalisation.
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