iiNet ups loan funding to $60m, upgrades guidance

Stuart Corner
Wednesday, 10 June 2009 02:42

IT Industry - Strategy

iiNet (ASX: IIN), Australia's third largest ISP, has announced the extension of its existing debt finance facility with Westpac for a further three years to June 2012, providing iiNet with increased funding of up to $60m.

iiNet presently has net debt of $24m and says the new facility leaves it with "significant headroom" to pursue its organic and inorganic growth strategies. The company has also upgraded its guidance saying it expects to post in excess of $415m of revenue, more than $65m of EBITDA and over $25m of NPAT for the financial year ended 30 June 2009 when it announces its annual results on 17 August.

Following the announcement Daniel Blair, telco analyst at Southern Cross Equities upgraded his price target for iiNet from $2.00 to $2.28, saying be believed the company to be a "a compelling investment," as a result of strong growth of the industry as a whole and its fragmented nature, creating acquisition opportunities for iiNet.

He added: "iiNet has a compelling product and content proposition backed by a market-leading customer service proposition, strong financials, improving free cash-flow and balance sheet strength."