February 8, 2018 / 7:40 AM / 6 months ago

UPDATE 1-Britain's TalkTalk to raise cash for fibre network, cuts forecast​

LONDON, Feb 8 (Reuters) - Broadband provider TalkTalk said it would raise up to 200 million pounds ($278 million) in a placing to invest in an ambitious plan to build a full fibre network and to strengthen its balance sheet.

It said it had agreed terms with Infracapital, the infrastructure equity investment arm of M&G Prudential, to create an independent company to build a full fibre network to more than 3 million homes and businesses in mid-sized towns and cities in Britain.

Infracapital would contribute 80 percent of the funding and TalkTalk 20 percent, it said.

TalkTalk, which spooked investors in November when it lowered guidance and cut the dividend, also lowered its full-year guidance on Thursday.

It said it expected full-year 2018 core earnings to come in between 230 million to 245 million pounds.

It had previously forecast earnings toward the bottom end of a 270 million to 300 million pound range.

The company, which has increased its focus on the value end of the market through its long-term low price plans, said it added 37,000 customers in its third quarter, an increase on 20,000 in the first and 26,000 in the second.

“We strongly welcome this commitment by TalkTalk to take full fibre broadband to three million homes and businesses in the UK,” Digital Minister Matt Hancock said.

“It’s fantastic to see TalkTalk stepping up to the plate.”

$1 = 0.7196 pounds Reporting by Paul Sandle, Editing by Kate Holton

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