TalkTalk has raised £200m from investors, just hours after announcing plans for a share placing.
Priced at 107p each, shares in the FTSE 250 firm regained some of the ground lost earlier today – they are currently 8.5 per cent down at 109.5p
“We are delighted that shareholders have demonstrated their support for our strategy," said chief executive Tristia Harrison. "This strengthens our balance sheet as we continue to grow and invest in Britain’s full fibre future.”
TalkTalk shares were worth more than 400p just under three years ago. This morning they slipped below 100p after the telecoms firm warned on profits, slashed its dividend and went cap-in-hand to investors.
Also announced was a tie-up with investment giant M&G that will see £1.5bn invested in delivering ultrafast broadband to 3m UK households.
Accendo Markets analyst Henry Croft said: "A decisive turn to fibre shows TalkTalk is willing to test new waters to reinvigorate its business, venturing deep into the brave new world to offset weakness from traditional divisions.
"However much depends on the success of this venture, as a failure to properly capitalise on demand for faster internet speeds in the smart appliance age could spell the beginning of the end for a company once seen at the forefront of UK digital innovation. And that was just 15 years ago."
Too large for one company
A spokesperson for CityFibre, a specialist in building fixed fibre to the premises, said: "CityFibre notes today’s announcement from TalkTalk indicating its intention to build a full fibre network to up to 3m homes and businesses. Whilst at a very early stage, this marks further momentum behind the drive for full fibre and could present further opportunity for collaboration to achieve critical national coverage.
CityFibre has long advocated the need for investment in the UK’s digital infrastructure and we remain steadfast in our belief that new full fibre providers are best placed to deliver this – faster and at better value than Openreach.
Achieving national coverage is a task too large for any one company and investment from multiple fibre providers will be required to complete the job.