Deleveraging the balance sheet means the company now has a “robust capital structure and a fully funded business plan”, helped along by £80 million from its incoming shareholders, which was secured in December last year, we’re told.
The recapitalisation was agreed unanimously by the existing lenders and shareholders, and ownership of the company has been transferred to a consortium of investors, including the National Wealth Fund, ABN AMRO and NatWest.
With that done the altnet says it is “entering its next phase of growth from a position of significantly greater strength and providing a stable foundation to deliver long-term, sustainable growth.”
The Abingdon-based altnet has been around since 2010, and now employs more than 600 people and serves 170,000 customers across 26 counties, we’re told.
The FT had advanced knowledge of the move, and said in its report yesterday that the firm has been struggling with a nearly £1 billion debt pile after an equity injection from shareholder Equitix it was expecting didn’t happen back in 2023.
It reports that the deal today involves 11 lenders taking over Gigaclear from former shareholders Infracapital, Equitix and Railpen, and that: “Their haircut may amount to as much as 40 per cent of their loans, according to people familiar with the matter.”
In its coverage ISPreview notes that “Taxpayers are exposed to this because the NWF gave a £240m guarantee as part of a wider £1.5bn investment into the company during 2023.”
A National Wealth Fund spokesperson also told the FT: “We continue to be supportive of the business. Digital and technology is a significant sector for the fund, with a particular focus on supporting altnets like Gigaclear, which are delivering Building Digital UK contracts under the government’s Project Gigabit programme.”
For its part Gigaclear says it is EBITDA positive and its ticking the boxes on key financial metrics with a path to cashflow positivity in the near future. Last year the company expanded its network under Project Gigabit, hooking up more than 30,000 new premises, and it says is on track to achieve a 28% penetration rate.
“I am delighted that we now have a satisfactory resolution of the negotiations with our shareholders and lenders on how Gigaclear is funded, and I look forward to leading the company through this next phase of growth,” said Nathan Rundle, CEO of Gigaclear. “This new funding means we can continue with our plans to add more customers to our network, remaining fully focused on our goal to bridge the digital divide in rural Britain and deliver ultrafast, reliable broadband for homes and businesses that need it most.”
In terms of its plans for the future, Gigaclear says it intends to continue expanding its customer base, and invest in technologies such as AI-powered installation tools. “Our focus remains on our mission to upgrade rural digital infrastructure and ensure underserved areas have access to fast, reliable connectivity,” states the release.
Earlier this month a report from Point Topic on the wider market noted that in Q4 altnets racked up 250,000 net additions, up from 200,000 in Q3, while their customer base stood at an estimated 3.55 million, an increase of more than 31% on-year.
Which sounds good, but the report also noted: “With FTTP now mainstream and competition intensifying, altnet pricing and operational models face increasing pressure, raising questions about how many can remain sustainable as take-up normalises and overlap with larger networks grows.”
Meanwhile a report from Enders Analysis last November showed that altnets’ overall accounting net losses widened to £1.5 billion in 2024 from £1.3 billion a year earlier. It pointed to EBITDA losses, a sharp rise in interest costs, weakening ARPU, high operating costs and an increasing burden that looks “unpayable under any reasonable scenario.”
Talk of consolidation in the UK altnet sector has been rumbling for some time now, and that could go a lot of ways – but it does seem the pressure is mounting up.
UPDATE 09/04/26 13:50: A spokesperson from the National Wealth Fund told Telecoms.com: “Project Gigabit was introduced by the Government to help ensure rural and hard to reach areas have gigabit capable broadband. Our investments in the sector have been made to support that policy outcome. We expect the sector to go through continued evolution, change and consolidation, and we look to manage our exposure while helping to deliver policy objectives and seeking to maximise value for money.”
