TPG Telecom shares have slumped in their first trading session since the internet provider launched a capital raising to help fund its plan for its own mobile network.
TPG plans to spend $1.9 billion to build Australia's fourth mobile network after securing premium mobile broadband spectrum in a government auction.
The company is raising $400 million through a rights offer to help fund its spectrum acquisition, issuing new shares to investors at $5.25, a hefty discount to its $6.54 share price before the announcement.
TPG has raised about $81.5 million from institutional investors and another $238 million from executive chairman David Teoh and associates and key shareholder Washington H Soul Pattinson, taking proceeds to $320 million.
The balance is to be raised via an offer to retail shareholders.
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TPG shares have dropped close to the entitlement offer price, hitting a low of $5.33 soon after a trading halt was lifted.
The shares ended the session down $1.04, or 16 per cent, at $5.50.
TPG's move into the mobile market continues to unnerve Telstra investors, with the leading telco's shares down 3.9 per cent at $4.00 on Thursday, and down 7.6 per cent since TPG's announcement.
