Victorian-based ISP Aussie Broadband is giving any customers it had at September 7 a chance to purchase between 2,000 and 10,000 shares as part of its initial public offering (IPO).
"This is an unusual offer for a company to make, but it aligns with our value of being good to people," Aussie Broadband managing director Phil Britt said in an email to customers.
"In the spirit of one of our other values, no bullsh*t, the allocation of shares will be determined on a first come, first served basis if demand exceeds supply."
The company is selling between 30 million to 40 million shares at a value of AU$1 each, which would give the ISP market capitalisation of between AU$180 million to AU$190 million, and an enterprise value of approximately AU$150 million. Following the IPO, the current shareholders in the company would have a total stake of around 78.7% to 83.1% depending on how many shares are sold.
In its prospectus, the company said it did not intend to pay dividends to shareholders, and would instead be investing the money back into the business. Of the money raised, between AU$20 million to AU$26.5 million would be used to build out Aussie Broadband's own fibre optic backhaul network, AU$7 million to AU$10 million will be set aside for working capital, and around AU$3 million to AU$3.5 million will be used on costs associated with the IPO.
Aussie Broadband currently has wholesale agreements with Telstra, Vocus, and Opticomm, as well as Symbio for VoIP services. It expects the build out of its fibre network will replace up to 63% of its current leased backhaul to NBN points of interconnect, and enable it to end dark fibre leases between capital city data centres.
"Capital expenditure on this project is budgeted to be AU$67 million and is expected to require two years to complete. The first two stages of deployment of the company's fibre project commenced in May 2020 and are expected to be completed during September 2020," it said in its prospectus
"The company estimates that the fibre project will have a minimum useful life of 25 years, and will improve the company's ability to provide redundancy and increase capacity loads to meet market demand."
In fiscal terms, Aussie Broadband has been able to grow its revenue from AU$49.3 million in FY18 to AU$190.5 million in FY20, and forecasts it will record AU$338 million in the coming year.
Statutory earnings before interest, tax, depreciation, and amortisation (EBITDA) was reported as AU$3 million for the 2020 fiscal year, and forecast to be AU$10.8 million for 2021.
However, depreciation and financing expenses resulted in the company posting a statutory loss of AU$12.3 million, with that number to widen to AU$15.2 million next year. In statutory terms, the company has not posted a net profit since at least FY17.
The company said it has funded its operations thus far from business equity and debt capital raising, and it would continue to do so in future.
Shares in Aussie Broadband are expected to start trading on the ASX on October 27.
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