12 May 2017
Gowling WLG's corporate team has acted for established client, Gigaclear plc, on aggregate of £111 million of equity investments to expand its provision of ultrafast fibre-to-the-premises networks to rural communities. Gigaclear plc is focused on bringing ultrafast pure fibre broadband direct to rural communities in the UK. Since the beginning of 2017, Gigaclear plc has further strengthened its pipeline of 'Broadband Delivery UK' ("BDUK") projects.
The equity investments (all at a subscription price of £3.25 per share) comprise of:-
- a £60 million cash subscription by Infracapital (GC), established by Prudential Greenfield (an investment vehicle whose investors include Prudential Assurance, the life assurance business of Prudential PLC and external investors);
- a £35 million cash subscription by Railway Pension Investments Limited ("Railpen"), as agent for the railways Pension Trustee Company Limited;
- a £15 million cash subscription by funds managed by Woodford Investment Management limited - the CF Woodford Equity Income Fund (£9 million), Woodford Patient Capital Trust plc (£5.25 million) and the Omnis Income & Growth Fund (£0.75 million); and
- a £1 million shareoffering to existing Gigaclear shareholders.
In addition, Railpen made available a 'share sale facility' to existing shareholders in Gigaclear plc, in order to increase its overall investment in the business. Railpen has also acquired an aggregate of £10 million worth of ordinary shares in Gigaclear plc (at a purchase price of £3.25 per share).
The first of these new BDUK projects is expected to commence in the second quarter of 2017, with more of the new projects kicking off as the year progresses and the equity investments will significantly help in accelerating Gigaclear's ability to build out [the first stages of] the new networks under those BDUK projects.
Gowling WLG corporate partner, Jeff Elway, led on the fundraisings, supported by associates Neil Hendron and Emily Nicholson and trainee solicitors, Emily Airton and Rebecca Limer.
Commenting, Jeff Elway said: "This is the third round of major equity fundraising since October 2015, when we first acted for Gigaclear plc and they got very close to floating on AIM. It is therefore fantastic to see the company growing at such a pace now with up to £110 million of additional funds being made available by not only existing investors, but also Railpen as a major new investor."
The latest equity investments from Infracapital (GC), Railpen and Woodford Funds follow on from the successful completion of two rounds of equity financing since the start of 2015 - £24 million by Infracapital (GC) and one of the Woodford Funds in May 2016 and an aggregate of £30 million (in two tranches each) by Infracapital (GC) and a second of the Woodford Funds in May 2015.
The new £60 million of equity investment by Infracapital (GC) and £35 million equity investment by Railpen is in four tranches - the first of which (£27 million in the case of Infracapital and £20 million in the case of Railpen) completed on 4 May 2017, with three further tranches (of £11 million in the case of Infracapital and of £5 million in the case of Railpen) to be put in over the next 12 months. The whole of the £15 million equity investment by the Woodford Funds was completed on 4 May 2017.