PowerTel take 15% of iiNet as WA ISP confirms earnings cut

Sydney-based telco PowerTel is to take a 14.9 per cent in iiNet as the Western Australian ISP is expected to return to trading on Monday with a revised earnings outlook of $24.6 million for the full year, before abnormal items.
The PowerTel stake has been agreed at 16.4 million shares at 85 cents each, a 50 per cent discount to the $1.69 per share price that iiNet last hit before a trading halt in its shares was called about five weeks ago.
The price is a huge drop from iiNet's $3.40 per share peak in mid September last year and produces a market capitalisation of around $100 million.
However, iiNet sees upside from the deal by marrying its existing broadband infrastructure, established for a retail customer base, with PowerTel's wholesale client network of smaller ISPs.


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