Aussie Broadband (ASX:ABB) share price edges higher on capital raise update

The company’s shares are pushing higher…

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The Aussie Broadband Ltd (ASX: ABB) share price has come out of a trading halt today.

This follows an update in regards to its capital raising efforts from the broadband provider.

At the time of writing, Aussie Broadband shares are up 1.3% to $4.69. In comparison, the All Ordinaries Index (ASX: XAO) is down 0.27% to 7,805 points.

Successful placement

In a statement to the ASX, Aussie Broadband advised it has successfully completed its institutional placement.

The company received firm commitments from both new and existing institutional, sophisticated and professional investors to raise $114 million.

The placement will see approximately 28.5 million new ordinary shares issued at a price of $4 apiece. This represents a 13.6% discount on the last closing price on 6 September and a 2.6% discount on the 10-day volume-weighted average price.

The funds acquired from the placement will be used to support a variety of company objectives. This includes growth by mergers and acquisitions, new business product and technology development, and increasing fibre and network assets.

The shares are expected to be allotted and issued on 15 September.

In addition to the placement, Aussie Broadband will undertake a Share Purchase Plan (SPP), raising another $10 million. The terms will be the same as offered in the institutional placement.

The dispatch of the SPP offer documents and opening date will also occur on 15 September.

Aussie Broadband managing director, Phillip Britt commented:

There are promising opportunities to execute transformational acquisitions in the business segment that will complement and improve Aussie Broadband’s position in the market.

We believe this will help us to continue delivering outstanding results for our shareholders and help the company to continue to change the telco game in Australia.

About the Aussie Broadband share price

Over the last 12 months, Aussie Broadband shares have surged 140% higher, with year-to-date gains above 130%. The company’s share price reached an all-time high of $4.79 on Monday, before treading slightly lower.

On valuation grounds, Aussie Broadband presides a market capitalisation of roughly $881.2 million, with 190 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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