TPG Telecom is raising $300 million through a placement of shares to local and overseas institutions.
The telco giant on Wednesday said it will use the proceeds to partly repay debt raised at the time of its acquisition of smaller rival iiNet earlier this year. Its bank debt rose to $1.85 billion following the acquisition.
TPG shares have been placed in a trading halt ahead of a bookbuild later on Wednesday, with shares expected to resume trading on November 12.
"The proceeds will be used to partly repay the acquisition debt in order to support ongoing growth capex initiatives and to minimise the company's overall cost of funding," TPG said in a statement.
The share sale will not have a material impact on the company's earnings this financial year, and will reduce its debt gearing to 2.2 times, from 2.6 now, it added.
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The telco wrapped up a $1.6 billion takeover of iiNet earlier this year, making it Australia's second biggest fixed-line internet provider with 1.7 million broadband subscribers, behind Telstra.
The company also announced, in September, a $1 billion tie-up with Vodafone, under which its 320,000 mobile users will be switched over to the Vodafone network.
TPG shares, which are up nearly a quarter since September, closed at $10.82 each on Tuesday.
