Orbital Energy Group, Inc. (OEG) stock prices were up by a massive 73.38% as of the market opening on June 1st, 2021, bringing the price per share up to USD$6.16 early in the trading day.
GTS Awarded Project
The company announced on June 1st, 2021 that its recently acquired subsidiary, Gibson Technical Services (GTS) had been awarded a project by TEC of Jackson, Inc. The project will oversee the engineering and construction turnkey services across an area of Central Mississippi that spans nearly 700 miles. The project is scheduled to be completed over the next four years.
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Project Outlook
The engineering phase of the project commenced in April 2021, with construction forecasted to start by June of the same fiscal year. The capital used to fund the completion of the project will be generated by both private TEC capital, as well as from the Federal Government’s Rural Digital Opportunity Fund (RDOF) for rural fiber buildouts.
RDOF
The RDOF extends the Connect America Fund (CAF) from the Federal Communication Commission (FCC) and will facilitate the provision of USD$20.4 billion in funding. The funding will span a period of 10 years and will be intended to support broadband networks in rural communities across the nation. The collaboration of GT and TEC effectively pioneers the first RDOF rural build to be started in the United States.
Project Impact
The awarding of this project by the giant telecommunication service provider TEC consolidates GTS’s position as an industry leader. It indicates confidence in the company’s ability to deliver the best quality engineering and construction services. The project also highlights the massive value created by the company’s recent acquisition.
Solid Liquidity Position
The company generated USD$45 million through the selling of equity capital during the course of Q1 2021, with the funds raised being used to accelerate growth organically, as well as through strategic acquisitions. As of March 31st, 2021, the company reported cash and cash equivalents amounting to USD$34.7 million, while restricted cash was USD$1.2 million.
Future Outlook for OEG
Armed with a solid liquidity position, OEG is poised to capitalize on the opportunities presented to it in conjunction with the long-term profitability associated with the TEC project. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.
