Shares in TalkTalk plunged by around 10% on Thursday after the company unveiled a £200m equity fund raising and slashed its dividend.
The UK-listed broadband provider wants to raise the funds to shore up its balance sheet and help pay for a new fibre network.
Along with cutting its dividend, TalkTalk also reduced its earnings target for 2018, which had previously been pared back as recently as November.
Shares were around 10% lower as at 1100 GMT, trading around 107p.
TalkTalk said it now anticipated full-year 2018 core earnings in the range of £230m to £245m, having earlier guided earnings at the bottom end of £270m to £300m.
“Looking ahead we see real opportunity to continue growing the core business whilst also investing in full fibre. We have therefore strengthened our balance sheet and temporarily reduced our dividend to take full advantage of the opportunities available,” said executive chairman Charles Dunstone.
TalkTalk revealed it had agreed a deal with infrastructure equity name Infracapital to establish an independent company that will create a full fibre network to over 3 million homes and businesses across the UK.
“By signing heads of terms with Infracapital we are making good progress towards putting TalkTalk at the heart of Britain's fibre future by building a full fibre network, bringing faster, more reliable internet to millions of homes and businesses,” added Dunstone.
The new company will be 80% funded by Infracapital and 20% by TalkTalk, in a potential equity investment of up to £500m.