The 5G Networks Ltd (ASX: 5GN) share price is breaking its 3-day losing streak to rebound strongly today. This comes after the telecommunications carrier announced an update in regards to its loan to Webcentral Group Ltd (ASX: WCG).
At the time of writing, 5G Networks shares are up 8.24% to 92 cents apiece.
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What did 5G Network announce?
5G Networks shares opened this morning relatively flat before quickly soaring within the first 15 minutes of trade.
According to this morning's release, 5G Networks has received a $15 million loan repayment from its acquired business, Webcentral Group. 5G Networks took control of the digital services provider in October 2020.
Recently, Webcentral Group took out a $16.6 million debt facility from Commonwealth Bank of Australia(ASX: CBA). These proceeds were predominantly used to make a part repayment of the $41 million loan given by 5G Networks.
As such, approximately $26 million remains on the loan. This will reduce Webcentral Group's current borrowing costs.
5G Networks said it will use the funds for further acquisition opportunities when they arise.
5G Networks share price summary
Established in 2013, 5G Networks is an Australian-based provider of Internet broadband and cloud infrastructure services to mid-market corporate industries. The company primarily engages in providing high-speed broadband access to businesses.
In addition, cloud-based solutions, managed services, and network infrastructure services are also offered.
5G Networks shares have fallen roughly by 25% over the past 12 months, and 36% year-to-date. The company's share price hit a 52-week low of 85 cents yesterday, most likely caused by some tax-loss selling.
On valuation grounds, 5G Networks has a market capitalisation of about $102 million, with 114 million shares outstanding.
