Rural network builder and ISP Voneus, which aims to cover 350,000 UK premises via both their gigabit-capable fixed wireless access (FWA) and Fibre-to-the-Premises (FTTP) broadband networks, has received an additional capital injection of £18m from existing investors that appears to have changed its ownership structure a bit.
Until recently Voneus was being backed by up to £250m from investors including Macquarie Capital, IIF, Tiger Infrastructure Partners and bank lenders. But the situation became a bit more complex after last year’s merger with SWS Broadband (Rural Broadband Solutions), Cadence Networks and Broadway Partners (here).
The above deal meant, among other things, that Rural Broadband Solutions Holdings Limited (RBSHL) held a significant stake in Voneus, while Global Connectivity PLC (G-CON) retained their existing 15% stake in RBSHL. The situation changed again in January 2024 after a further £25m investment boost from G-CON, which meant that RBSHL ultimately increased its stake in the operator to 38%.
According to a new press release from G-CON today (here), RBSHL has now injected a further £18m (capital) into the business and thus increased their stake again to 41%.
G-CON Voneus Investment Statement
The most conservative method of valuation, particularly in the early period of a merged entity, is to use the cost of investment as the principal determinant. This is what we have adopted, which mirrors the practice of Tiger Infrastructure, partner in and majority shareholder of RBSHL. To date Tiger has invested £72 million in RBSHL.
The vast majority of investment has been made since the merger of and interests into Voneus was announced in September 2023. Moreover, by prior agreement, the extent of this subsequent investment has far exceeded that made by Macquarie. As a result, percentage ownership of Voneus has increased from an initial 25% to approximately 41% with a consequent increase in in-direct ownership.
Moreover, Voneus now operates on a fully integrated basis with a resultant increase in the rate of growth of homes passed, those ready for service and sales to customers. The historic valuation of approximately £6.8 million or 1.9p per GCON share in our audited accounts for the year ended 31 December 2023 reflects neither increased percentage ownership of Voneus since the 25% starting point, nor the growing maturity and success of the underlying business.
In addition to all this, G-CON has also published an interesting investor’s document, which with respect to Voneus notes that the network operator is now aiming to reach a “target pipeline of 370,000 (up from
an initial 350,000) homes passed“, which they add “will appeal to strategic buyers within the next 12-18 month” (this sounds a bit like they’re positioning the business for an acquisition).
The same document notes that Tiger is currently planning to fund the final rounds of investment in a “similarly disproportionate manner” and take the RBSHL ownership to “at least 44%” in the not too distant future. The catch with Voneus is that we still know relatively little about the provider’s broadband rollout plans and progress, as they’ve historically not been an operator that likes to boast much about their achievements.
Voneus currently has broadband networks in over 35 counties across England, Scotland and Wales. Residential customers of their full fibre broadband packages pay from £38.99 per month on a 24-month term for their 250Mbps (symmetric speed) package with free installation, which rises to £74.99 for 900Mbps.