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Good to see recent contract wins generating cashflow both present and future. Seems to be a share under the radar.
Director Gary Mesch sold 250,000 shares at 50.0 pence each on Tuesday.
at 51p. just after the share price came down a lot. DYOR
Dropping the share price. No surprise really.
Just for information. City Fibre is one of Techinvest's nap tips for 2016.
According to the admission document, CFH will be paying interest at a rate of 10% over the LIBOR rate on the finance facilities. Details can be found here: hTTp://static1.squarespace.com/static/50a0c308e4b081ffff792a0b/t/566e5d57a128e652f046acd4/1450073431947/CityFibre+-+Admission+Document+2015+FINAL.pdf
to be held at the offices of Olswang LLP, 90 High Holborn, London WC1V 6XX at 10.00 a.m. on 12 January 2016.
KCOM group have released that the Net book Value of the Assets is only £41.8 Million and the deal does not include network switching, transmission, control and application elements for which the ownership will be retained by KCOM Group. KCOM group have released that the Net book Value of the Assets is only £41.8 Million and the deal does not include network switching, transmission, control and application elements for which the ownership will be retained by KCOM Group. CFH will only own ducts, sub-ducts, chambers, cables and cable joints, ODFs and patch cords.
The Primary objective of purchasing this Network is to sell Dark Fibre to the likes of Vodafone and Talk Talk and besides this to sell to Government and Councils who are high Margin from what I can see and in so doing offer some competition The agreement with KCOM Gaurantees 5 years but it is unlikley not to go beyond that. Mercury was actually I believe primarily funded by Barclays as part of a Consortium with C&W and BP. I understand that this KCOM Network will give access to around 24 of the 31 major Cities . Yes I am Technical and I am familair with everything from 64k to 100G including PW's Kilostream, Megastream, Lan Phy, Wan Phy, Radio, DWDM, MPLS Products and all aspects of Network, Fibres and Transmission equipment. You always Post Negatively about this acquisition and without justificaton because I doubt that you are better qualfied than the Senior Managemnt at CFHL whom are working through this deal and making the decisions . What I wonder is your motivation (rhetorical as I am not really interested)
CFHL sells a maximum 1G, check their product portfolio. Most competitors now offer Gig service to Business Customers. Regarding 60% of outlay given back over 15 years, the agreement only guarantees 5 years. KCom have an option to pull out after 5 year but have a right to carry on for up to 15 years if they wish to. Re: Mercury. Mercury was funded by its Giant parent company – Cable and Wireless. The figure of 8 only connects main Data Centres which are mostly shared. Mercury had to build out its own Networks out from the Data Centres which now belong to mainly Vodafone and the remainder to Virgin Media due to the merger of C&W and the Cable companies. Also to supplement its Network, Mercury had to lease a lot of lines from BT (if you’re technical, you’ll probably remember BT Megastream and Kilostream Ccts) and had a lot of its own point-to-point Radio Links. DYOR
I agree, that is a good part of the deal, probaly the only way that CiTy Fibre would take this deal on, and probably why the pacing will be OK. Interesting to see where the share price ends after the placing has taken place. Not long to wait now. However always DYOR.
It's the same Figure of 8 that Mercury made a succes of and CFHL sells minimum 1G. I am invested in a few stocks, you have only ever commented on this one. My position is my business and yours is yours. Think about it , 60% of the outlay for the Network will be given back by KCOM over 15 years , CFHL won't have to put much traffic on it to make it wrok.
What's your position in CFH?. If KCom couldn't make it work what makes you think CFH can, especialy given the failure history available in the public domain?
Even if CFHL do not put one single Customer on the KCOM Network , it will receive back circa £4M per year from KCOM (£5M, minus £1M for upkeep) to support it's existing Services on this Network, that alone comes to £60M over the Fifteen years discussed.
It could also be regarded as a Company Breaker.
CFHL Raising £80m which equals 30% more than the current Market Cap demonstares aspirations and brings on board a large revenue opportunity. It would be ridiculous to compare this to BT but certainly the deal could regarded as a Comapny maker
CityFibre intending to raise £80 million pounds by placing another 160 million shares at 50p in January.
Clearly at this stage the "rival BT" aspect could well be somewhat of a misnomer, but this figure of eight Network is pretty much how Cable and Wireless (Nee Mercury) started out and it is a decent Network to have (the age of it being pretty irrelevant I suggestat this stage). My only misgiving about the KCom acquisition is that perhaps it may have been better to get the equipment on the end of it as well. Competition is all over the place, Virgin Media , owned by Liberty Global could end up in the hands of Vodafone , whom own the old Cable and Wireless Network or vice versa, LG is buying the old CWC Company as well. Plenty of activity in the sector , plenty of profits , potential of takeovers, lots of revenue to chase. Getting back directly to CFHL, they seem to be building a niche market to some degree by targetting high Net Worth business in the Governement sector and by offering Gig as standard. They have made good progress and I fail to see how it should not continue. Pretty much all Coms companies end up highly leveraged at some point but there are decent returns to be had. The growth of the Junior stocks in this market can be very rapid, there are plenty of examples and I proffer that none were achieved without significant debt. There is a reason why so much is being invested by so many in this arena and why there have been so many takeovers and Mergers Globally
The 50p price is apparently a discounted price at 25%. If they’ll go back up to 70p depends on a number of factors including the total number of shares in issue, the amount of CFH’s debt and how long it takes to have any impact on the market etc. Shares could also go down. Don’t forget Virgin Media is also expanding its network to rival BT, funded by £3.5 Billion Pounds injection from parent Liberty Global and Vodafone has also announced its intentions. Also you may find some interesting facts on Bankruptcy (just google “i3 Group”). Regarding who I work for, I prefer not to disclose. Whatever you decide to do, have a merry Christmas and a prosperous new year.
Interesting point and a great question
Many companies have high levels they can borrow up to, but they dont use it all usually
It is wriiten clearly on the Company Website - cityfibre.com/news/ (www deleted to avoid a link)
Not seen that mentioned anywhere. Have I missed it
If you want buy shares at 60p when they will be worth 50p or less in January when the Company places another 160million shares at 50p and takes on another £100 million in debt to make the purchased network usable, it’s your choice. Even the purchased network, when it becomes usable, will only be equivalent of a fraction of BT’s Infrastructure and I don’t think BT will even notice the “Rivalry”