Superloop raises AU$50m to construct Hong Kong fibre network

Superloop has raised AU$7.4 million to bring its total to AU$49.3 million to construct a network connecting datacentres, enterprise buildings, and subsea cables in Hong Kong.

Asia-Pacific fibre infrastructure company Superloop has announced that it has raised an additional AU$7.4 million through its share purchase plan (SPP) offer for the express purpose of building out a AU$45 million 110km fibre-optic telecommunications network in Hong Kong.

Superloop completed the SPP on Wednesday, issuing around 3.9 million shares at AU$1.90 per share, with holding statements expected on the last day of 2015.

Prior to this, the company had also raised AU$41.9 million through placement of 22,045,000 fully paid ordinary shares at AU$1.90 per share to professional and sophisticated investors.

Of the proceeds raised, AU$45 million will be used for building the Hong Kong network asset; AU$1 to AU$2 million for Hong Kong sales and operations working capital; AU$1.5 to AU$3.5 million for expanding the company's Singaporean network; and AU$1.4 million for payment of costs for the offer.

Superloop announced in early December that it had entered a legally binding agreement with an unnamed "leading corporation" to construct and run the fibre-optic network in Hong Kong, to which is holds a 25-year indefeasible right of use, with two five-year options to extend.

The 110km network, with two 1,000-core count fibre cables, will connect Hong Kong's primary datacentre campuses and enterprise buildings, and has an installation timeline of 12 to 14 months. It will initially connect 30 strategic sites and six key datacentres.

The Superloop (Hong Kong) subsidiary was granted a Unified Carrier Licence (UCL) by the Hong Kong Office of the Communications Authority in August, with Superloop CEO Daniel Abrahams stating that this would enable the company to provide the Chinese territory with fixed-line telecommunications services.

"The UCL allows Superloop to build, operate, and provide telecommunications networks and services in Hong Kong," Abrahams said.

While it is being completed, Superloop will be able to provide an interim network solution with limited fibre capacity to its primary business clientele, with interim customers to be transitioned to the permanent network as it is installed.

Superloop also announced plans to build a direct submarine cable-crossing path between the datacentre campuses of Tseung Kwan O (TKO) -- Hong Kong's new major hub for technology, datacentre, financial, and media companies, as well as submarine cable landing stations -- and Chai Wan.

TKO Express is subject to a final investment decision, and the company has yet to obtain permits and approvals. In-principle support for the cable's construction is currently being sought from the relevant government departments in Hong Kong, with assessments for environmental impacts, marine engineering, and cable design works under way.

TKO Express has a 12- to 15-month completion timeline, once it is approved.

Superloop was founded by Australian technology entrepreneur Bevan Slattery in 2014, and listed on the Australian Securities Exchange (ASX) in June after a successful initial public offering that raised AU$17.5 million through more than 2,300 investors.

The company was created when Megaport's fibre assets were spun off so that Megaport could return its focus to expanding its layer 2 elastic connectivity platform outside of Asia and Australia.

Superloop's 134km fibre network in Sydney, Melbourne, and Brisbane was subsequently sold off to Amcom. In return, Superloop secured a 15-year exclusive lease on the network, which services such customers as iiNet, M2, and Anittel.

In Singapore, the company acquired and has been installing a 117km duct network underground, with a fibre-optic network also currently being rolled out to connect datacentres and submarine cable landing stations under Project Red Lion.

Superloop also announced in early December further investment into Project Red Lion, dedicating between AU$1.5 to AU$3.5 million from its funds raised through the SPP.

Abrahams said in June that the dark fibre company would be targeting telcos and content providers in Asia Pacific, predominantly in Singapore, with the swell in subsea cables and datacentres a major drawcard for the region.

Superloop last month acquired broadcast media network Cinenet Systems for AU$3 million, with the company to provide Superloop with an avenue to enter the media industry and the US market.

The AU$3 million acquisition, completed at the end of November, consisted of AU$1.5 million in cash and AU$1.5 million in Superloop scrip.

Cinenet, established in 2003, owns a high-speed broadband network specifically for use by the broadcast and media industry. It delivers wide-area network services to customers including movie studios, producers, editing facilities, sound facilities, visual effects providers, and DVD producers across Sydney, Melbourne, Brisbane, Adelaide, and Los Angeles.

The media companies use the network to create, exchange, and access large digital files and data sets, connect to datacentre and cloud providers, and use video streaming, VoIP, and collaboration tools.

"The acquisition of Cinenet provides Superloop an opportunity for the company to quickly expand its network capabilities into the fast-growing digital media vertical, which is currently experiencing massive growth," Abrahams said.

"Furthermore, the Cinenet acquisition brings a great portfolio of customers and establishes an international gateway for Superloop and our customers in the United States."

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