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Digital 9 planning capital return as Aqua Comms sale completes
(Sharecast News) - Digital 9 Infrastructure said on Wednesday that it has completed the sale of its Aqua Comms subsea fibre business for net proceeds of £34m and planned to return a portion of that to shareholders, while retaining capital to support an orderly wind-down and further asset disposals. The London-listed investment trust said completion followed satisfaction of all closing conditions under the sale and purchase agreement for Aqua Comms, which operates Atlantic and Irish Sea subsea fibre assets.
It said the final net consideration was £1.6m higher than the £32.4m valuation reported in Digital 9's interim results to 30 June, reflecting updates to the completion account mechanism and changes in the dollar-to-sterling exchange rate since that date.
The proceeds were calculated using a USD-GBP exchange rate of $1.3527 as at 30 December.
Its board said it intended to return proceeds to shareholders, net of anticipated future working capital requirements, via a pro-rata compulsory capital redemption, which was expected to be the most efficient and cost-effective method of returning capital.
Digital 9 indicated that around one third of the proceeds would be retained to meet ongoing working capital needs.
The firm said retained capital would cover operational cost commitments through to the final wind-down of the business, following the anticipated future sale processes for Elio Networks and Arqiva.
Those disposals were expected to take place over the coming years in line with the company's previously-communicated realisation plan, with the aim of maximising value for shareholders.
Digital 9 said maintaining an adequate working capital reserve would allow it to manage and optimise the timing of exits while providing liquidity to meet any unforeseen operational expenses.
The board said it would continue to monitor working capital requirements and would look to accelerate realisation plans and implement further capital redemptions when appropriate.
Further details on the proposed capital redemption scheme are expected to be provided in due course.
At 0859 GMT, shares in Digital 9 Infrastructure were up 3.45% at 6p.
Reporting by Josh White for Sharecast.com.
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