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Global Connectivity PLC on Wednesday said it swung to a modest profit in 2022 and is benefitting from a recent transaction with Tiger Infrastructure Partners LP, with the private equity firm agreeing to invest up to £75 million.
Global Connectivity, formerly known as Rural Broadband Solutions PLC, is an Isle of Man-based broadband provider to rural areas in the UK, through its investment in Rural Broadband Solutions Holdings Ltd. RBSHL is the holding company of Secure Web Services Ltd and Cadence Networks Ltd.
Global Connectivity’s net asset value was 1 pence per share on December 31, unchanged from the same date one year prior.
The company’s stock was down 19% at 1.10p per share in London on Wednesday afternoon.
Global Connectivity swung to a pretax profit of £360,000 in 2022 compared with a £1.1 million loss in 2021.
The company made a gain of £616,000 through the reversal of impairment of its intercompany loan with SWS, compared with a £544,000 cost the year before. Alongside a ‘significant reduction in running costs’, this caused Global Connectivity’s net asset value to increase to £4.9 million on December 31 from £4.5 million at the same time one year prior.
In late October 2022, Global Connectivity completed a deal with Tiger which agreed to invest up to £75 million in RBSHL, thereby owning 85% of the new jointly owned company. Global Connectivity said this placed RBSHL in a position to fund SWS and Cadence’s growth organically and by acquisition, with no further equity dilution for Global Connectivity until the maximum total investment has been reached.
Global Connectivity on Wednesday said Tiger so far has committed a £16 million initial investment in its first year of majority ownership. It acknowledged that 2022 had been ‘a year of transition’ but said Tiger’s holding in RBSHL ‘is the anchor to growing the company’s asset value.’
Global Connectivity said the lack of equity dilution, under the financing deal with Tiger, will enable it to operate as an investment vehicle with the capacity to seek opportunities in non-competing business sectors. The company said it is ‘already actively engaged’ in investigating such opportunities.
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