Telecommunications service provider Service Stream Ltd
(ASX:SSM) has announced a rights issue to raise $32.9 million at 38 cents a share.
The company says the raising will significantly improve Service Stream’s financial flexibility and debt profile.
The telco says proceeds from the raising will be used to repay part of the company’s $102.6 million net debt as at June 30.
Acting managing director Michael Doery says the company has commenced 2010 with a solid foundation underpinned by the AAS Contract, Jemena Networks and Sydney Water as well as the recent renewal of numerous contracts in TCI, Telstra Mobile Towers, Contact Centre Solutions, Optus DSL, and AMRS Origin Energy and ETSA meter reading.
The Australian Financial Review reports Mr Doery saying that the company believes implementation of the National Broadband Network may be a way off and that the raising is more about strengthening the company’s balance sheet than having funds built up for the National Broadband Network.
Service Stream’s 2008 net profit was its best in five years.
