In morning trade the Spirit Telecom Ltd (ASX: ST1) share price has been a strong performer.
At the time of writing the small cap telco company's shares are up over 2% to 23 cents.
This latest gain means the Spirit Telecom share price is up a sizeable 35% since the start of the year.
Why is the Spirit Telecom share price on the charge today?
Investors have responded very positively to news that Spirit Telecom has successfully secured a new and increased debt facility with banking giant Commonwealth Bank of Australia (ASX: CBA).
According to the release, the new debt facility will allow the company to draw down up to $8 million and comes with a margin of BBSY plus 3.85% on drawn amounts. It also includes $900,000 annual amortisation which is due to be paid quarterly commencing September 2019.
Why has Spirit Telecom secured a new debt facility?
Management advised that this increased facility provides the company with additional funding as well as the agility to execute on existing acquisition pipeline companies more quickly.
The release explains that Spirit currently has a pipeline of potential acquisitions moving through its evaluation and due diligence gates. These include companies providing business grade data, voice, and MSP services.
These potential acquisitions will add to the recent additions of LinkOne Group and Building Connect, which management revealed are integrating well and have "allowed Spirit to enter the Brisbane and Sydney markets and expand its Melbourne network to meet the increasing demand from Australian businesses for super-fast Internet across the East coast of the country."
Elsewhere in the industry, in early trade the Telstra Corporation Ltd (ASX: TLS) share price has edged higher to $3.88. On Monday the telco giant was given an add (buy) rating with a $4.47 price target by analysts at Morgans.
