Gigaclear is seeking new equity as Equitix dials back plans announced last year to provide up to GBP 420m of equity to the UK rural-focused fibre network provider.

The Abingdon, Oxfordshire-headquartered company is looking to raise new capital for expansion, sources said, noting that Equitix has only injected a portion of the amount it committed and is reluctant to invest more.

Equitix declined to comment. Gigaclear did not respond to a request for comment.

One of the sources said Equitix’s decision is motivated partly by a desire not to be too exposed to the UK fibre sector following a recent commitment to put more capital into Freedom Fibre after its recent merger with the UK operations of DigitalBridge-backed VX Fiber.

Equitix also recently committed another GBP 18m to UK fibre network operator Grain Connect.

News of the potential capital raise comes after Gigaclear, which is also backed by Infracapital, in September announced plans to slow its expansion and cut staff numbers, part of a broader trend in the UK fibre market amid nervousness over build costs and competition.

Gigaclear, which is active in rural areas across England, in its accounts for 2023, which were signed in April this year, said it was “actively engaged in capital raising activities.”

Infracapital is a long-time backer of Gigaclear, while Equitix came in last year with a commitment to provide up to GBP 420m of funding. The company also last year secured a debt facility of up to GBP 1.5bn with a group of banks.

UBS was Gigaclear’s advisor on the capital raising process that led to Equitix’s commitment to fund the company.

Despite the Equitix commitment and bank funding announced in 2023, Gigaclear said in its 2023 accounts that “a small amount of additional capital is likely to be required” for it to continue expanding its network.

Gigaclear said as it announced the slowdown in its planned expansion in September that it has now covered 560,000 premises in the UK of which 120,000 are signed up as customers. This represents rapid growth in recent years, although is still well short of its target of 1m premises by 2027.

Gigaclear’s revenue rose to GBP 33.8m in 2023 from GBP 25.7m the previous year although its loss adjusted for interest rate swap movements for 2023 was GBP 114.5m compared with a GBP 68.6m loss the previous year.