Spirit’s Share Price lifts on CBA’s $8 Million Debt Facility

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Today, Spirit Telecom Ltd [ASX:ST1] announced it has secured a new and increased debt facility with Commonwealth Bank of Australia [ASX:CBA] for $8 million.

At time of writing, Spirit’s share price is trading at 23 cents, up 2.22% .

The facility gives the telecommunications company added funding, so it can act on its existing acquisition pipeline companies faster.

Related: Discover the next White Hot Investments for 2019.

Is Spirit’s rural Australia’s 5G darling?

Currently, Spirit is working to deliver 5G connectivity to Victorian regional town Morwell (as stated in their contract), which has a population of around 13,000. Once successful, this will help decrease the digital divide between regional and metro areas.

There is also the possibility that spirit could extend its services to neighbouring towns such as Traralgon and Moe.

And could in time be rolled out in other regional areas all over rural Australia.

Spirit’s Managing Director Geoff Neate spoke about ST1’s funding, saying:

‘We are pleased to be working with CBA who clearly understand the potential of our business and are supportive of our acquisition roadmap. This expanded financial facility, together with the underwriting of $5.6 million options [ASX:STIO] by Shaw & Partners, will provide near term funding of a net increase of nearly $10M and the flexibility to advance our acquisition and organic growth targets.’

CBA’s backing and funding could be a good sign for Spirit’s share price and shareholders — as the 5G market is highly competitive when it comes to seeking finance. It could mean Spirit provided CBA with strong fundamentals.

Spirit’s share price 2019 outlook

While, Spirit’s recent 5G news is all very exciting for rural Australians and shareholders alike, it may take some waiting time to see the full fruition.

But when you’re investing in a growth company like Spirit, that’s something you should anticipate.

In the meantime, its integration of LinkOne Group and building connect is already in progress, where ST1 is upgrading the networks and supporting the sales team in addressing the ‘market demand for Spirit’s Sky-Speed business products.’

More to come.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: Free investor report reveals the highest potential growth sectors for 2019 and beyond. Download now to find out more.

Tags: ASX:CBAASX:ST1

Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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