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Telecommunications connectivity company Superloop (ASX: SLC) has fallen on hard times since a takeover bid from the Queensland Investment Company (QIC) failed to produce a firm deal.
Prior to this impasse with its suitor the company's shares were trading at $1.93 each, but at the time of publication this morning they were sitting at $0.99.
A big part of that fall has come since 1 July when Superloop slashed its FY19 EBITDA guidance from $13-18 million down to $7-8 million, attributing the revision to negotiations that were not completed within the year as expected.
Under a business as usual scenario, one might have expected this timing issue to translate into a slight boost for Superloop's FY20, but a letter to shareholders today from chairman Michael Malone (pictured) has put question marks over estimates for the year ahead.
"Regarding 2019/20 guidance, the company has formed the view that insufficient certainty now surrounds the previous 2019/20 guidance of $26-30m issued on 25 February 2019," Malone said.
This guidance will be revised after Superloop completes its FY19 results, with a projected guidance update for 1 August and fully audited FY19 results for 27 August.
In today's letter, Malone also provided more details over the protracted deal that put a spanner in the works earlier this month
"As outlined in our 1 July 2019 announcement, Superloop had been in the final stages of a material one-off transaction that would have delivered a result well within the guidance range for the 2018/19 financial year," he said.
"However, in the final days of the 2018/19 financial year, your Board became concerned that the proposed terms of the transaction were not in the longer term interests of your company.
"Accordingly, on 30 June 2019 the Board declined to accept the terms of that transaction as it stood and requested that management seek to negotiate more favourable terms," he said, noting negotiations are continuing.
Superloop's subsidiary SubPartners is involved in the INDIGO consortium that is implementing a subsea cable linking Sydney and Perth to Singapore, which by using optical technology will support up to 36 terabits per second.
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