Introduction

TalkTalk Telecom Group plc (TIDM: TALK)("TalkTalk", the "Company" or, together with its subsidiary undertakings, the "Group") today announces a placing of new ordinary shares of 0.1 pence each ("Ordinary Shares") in the capital of the Company (the "Placing Shares") to raise up to £200 million (before expenses).

The number of Placing Shares to be issued by the Company will not exceed 19.99 per cent. of the existing issued share capital of the Company.

The Placing will be conducted through an accelerated bookbuilding process which will be launched immediately following this Announcement.  The Executive Chairman and other directors of the Company have indicated their intention to participate in the Placing up to an aggregate amount of £40 million.

The Company has today announced its Q3 trading update for the quarter ended 31 December 2017. This notes Q3 net adds of +37k with strong on-net base growth in both retail and wholesale and an acceleration in net adds, with the current forecast raised to 150k-160k for the full year to 31 March 2018.

At the same time, the Company has also announced that heads of terms have been agreed with Infracapital, the infrastructure equity investment arm of M&G Prudential, for the creation of an independent company with Infracapital funding 80 per cent. and TalkTalk 20 per cent.  There will be potential equity investment of up to £500 million (enabling total investment of approximately £1.5 billion) to provide full fibre ("FTTP") to more than three million homes and businesses in mid-sized towns and cities in the UK. The heads of terms are subject to contract.

Reasons for the Placing

The net proceeds of the Placing will be used to strengthen the Company’s balance sheet, to support its continued customer growth and its investment in its long-term FTTP plans.

TalkTalk acknowledges that it is seeking to non-pre-emptively raise up to 19.99 per cent. of its existing issued ordinary share capital and therefore members of its Board of Directors and senior management have consulted with the Company’s major institutional shareholders ahead of this Announcement.  The Placing structure has been chosen as it minimises cost as well as use of management time at an important phase of TalkTalk's growth strategy.

Details of the Placing

Barclays Bank PLC, acting through its Investment Bank ("Barclays") and Deutsche Bank AG, London Branch ("Deutsche Bank") are acting as joint global co-ordinators and joint bookrunners (the "Joint Global Co-ordinators") in connection with the Placing.

The Placing is subject to the terms and conditions set out in the appendix (the "Appendix") to this announcement (which forms part of this announcement, such announcement and the Appendix together being this "Announcement").

The Joint Global Co-ordinators will today commence a bookbuilding process in respect of the Placing (the "Bookbuilding Process").  The price at which the Placing Shares are to be placed (the "Placing Price") will be determined at the close of the Bookbuilding Process.

The book will open with immediate effect following this Announcement.  The timing of the closing of the book, pricing and allocations are at the absolute discretion of the Joint Global Co-ordinators and the Company.  Details of the Placing Price and the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuilding Process.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of 0.1 pence each in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of issue

Application will be made for the Placing Shares to be admitted to listing on the premium listing segment of the Official List (the "Official List") of the Financial Conduct Authority (the "FCA") and to be admitted to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange"), (together "Admission").

Settlement for the Placing Shares and Admission is expected to take place on or before 8.00 a.m. on 12 February 2018.  The Placing is conditional upon, among other things, Admission becoming effective.  The Placing is also conditional upon the placing agreement between the Company and the Joint Global Co-ordinators (the "Placing Agreement") not being terminated in accordance with its terms.

The Appendix sets out further information relating to the Bookbuilding Process and the terms and conditions of the Placing.

The person responsible for arranging the release of this Announcement on behalf of the Company is Tim Morris, Group General Counsel and Company Secretary.

 

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement