Superloop shares drop 7% after legal error forces shareholder restructure

• Superloop (ASX:SLC) has seen a 7% share price drop amidst issuing a notice directing Aussie Broadband to sell 37.6M ordinary shares
• The move aims to cut Aussie Broadband’s voting power in Superloop to below 12% within 10 days to comply with Singaporean laws and SLC’s constitution
• SLC last traded at $1.18, at 11:45 am AEDT

Superloop (ASX:SLC) has experienced a 7% share price drop amidst an issued notice directing Aussie Broadband (ASX:ABB) to sell 37.6M shares to comply with Singaporean law and SLC’s constitution.

The move is aimed at reducing Aussie Broadband’s voting power in Superloop to below 12% within 10 days.

Aussie Broadband recently acquired 19.9% of Superloop’s voting power without prior approval from Info-communications Media Development Authority (IMDA) in Singapore, as required.

Upon being informed of Aussie Broadband’s acquisition, Superloop contacted Aussie Broadband, expressing concern over the breach of its constitution. Aussie Broadband has acknowledged its non-compliance.

Superloop’s constitution prohibits acquisitions surpassing 12% without necessary statutory approval from IMDA in Singapore.

Despite attempts by Aussie Broadband’s legal team to downplay the breach as “inadvertent,” Superloop remains committed to upholding legal obligations, to prevent jeopardising its statutory license in Singapore.

Superloop has acknowledged that without IMDA approval, Aussie Broadband cannot increase its voting power in Superloop, approval can only be granted if IMDA determines that Aussie Broadband “was not aware” of the contravention.

SLC last traded at $1.18, at 11:45 am AEDT.

ABB share price has also fallen 2.5% last traded at $3.46, at 11:45 am AEDT.