Gigaclear Advisors to Hunt Fresh Funding for Rural UK Broadband Build UPDATE

Abingdon-based broadband ISP Gigaclear, which has already extended their full fibre (FTTP) network to cover 580,000 premises (RFS) in rural parts of England (inc. over 130,000 customers), is reportedly hiring advisors to help it find new funding in order to continue their network deployments across the UK.

According to Bloomberg‘s (paywall) sources, advisor firm Teneo is working with Gigaclear on the funding effort. Lenders are understood to have heard pitches from financial advisers this week, although it will probably be some months before we see any outcome from such an effort. Gigaclear declined to comment on the report.

The report follows a few months after Gigaclear moved to slow its network deployment and cut some jobs as part of “planning for the next stage of its development” and a “re-focus on ultra-rural areas“ (here). The rural ISP said that it planned to build on this year’s record figures to “help drive economic growth in 2025“, not least by “ensuring that even more rural homes and businesses are benefitting from ultrafast broadband.”

Gigaclear’s latest annual accounts, which cover the period to the end of 2023 (here), revealed that their revenues had increased by 32% to £33.8m (2022: £25.7m) and their workforce had grown to 819 employees in 2023 (up from 670); this of course came before the recent announcement of further redundancies. But their losses for the year also grew sharply to £138.3m (2022: £21.8m).

The provider’s debt consists of almost £1bn in committed bank funding, including a term loan, a capex facility and a revolving credit facility, all due in September 2030. Gigaclear has also agreed with banks on a provision for an accordion facility worth over £500m. Suffice to say, building a new Fibre-to-the-Premises (FTTP) network in UK rural areas is a slow and expensive business, particularly in today’s challenging climate of high interest rates and rising build costs etc.

UPDATE 19th Feb 2025

Interestingly, a previously unnoticed report from ION Analytics, which was published last November 2024, has added some important context to all this. The report indicates that one of Gigaclear’s key investors, Equitix, appears to be reluctant to invest all the £420m of equity that it previously committed to the network operator.

Equitix’s decision is said to be partly motivated by a desire not to become too exposed to the UK’s strained fibre sector, following a recent commitment to put more capital into Freedom Fibre after its earlier merger with VX FIBER (note: Equitix also backs Grain). Meanwhile, The Telegraph (paywall) has suggested that the situation could end up impacting other areas, such as the Railpen’s (another investor) Railways Pension Scheme. Britain’s sovereign wealth fund is also a guarantor to a big slice of Gigaclear’s borrowings.