Spirit Telecom Ltd’s [ASX:ST1] share price was quick out of the blocks this morning.
The small–cap telco company’s shares climbed by more than 11% by close.
From a low in March, Spirit Telecom’s share price has been on a steady uptrend.
Today saw a further rise..but why?
What’s behind the price climb?
The company has managed to obtain a new and increased debt facility with the Commonwealth Bank of Australia [ASX:CBA], a good move in the minds of investors.
This new debt facility will make it possible for the company to draw down up to $8 million. It also comes with a margin of BBSY (bank bill swap bit rate) plus 3.85% on amounts drawn. This includes $900,000 yearly amortisation due to be paid quarterly, beginning in September 2019.
Why has Spirit acquired a new debt facility?
It was advised by management that this facility gives the company additional funding as well as the ability to fulfil already existing acquisition pipeline companies more efficiently.
At present, Spirit has a myriad of potential acquisitions awaiting evaluation and due diligence which include companies providing voice, business grade data and MSP services. These potential acquisitions will add to the recent additions of LinkOne Group and Building Connect. It’s also been revealed that the companies are gelling well together, making it possible for Spirit to join the Brisbane and Sydney markets as well as grow its Melbourne network.
This will allow the company to meet the needs and growing demand from Australian businesses to supply lightning fast internet on the east coast of Australia.
It could be a bright future for Spirit but only time will tell…
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