Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Southern Cross Concludes Negotiations

Southern Cross Concludes Negotiations

Southern Cross Cable Network (Southern Cross) has successfully concluded negotiations with its senior banking syndicate for a restructured bank facility.

Under the revised arrangements, the maturity date of a portion of Southern Cross’s senior bank debt (the “deferred loans”) has been extended, with maturity now occurring in five years time in April 2008. In addition, other terms applicable to the outstanding bank debt have been modified to provide Southern Cross with additional financial flexibility. This will better align Southern Cross’s overall debt repayments with anticipated future cash flows.

As part of the revised arrangements, Southern Cross’s two largest shareholders, Telecom and Optus, have provided contingent credit support to the senior banks in respect of the principal of the deferred loans (a maximum amount of US$151 million). No changes to Southern Cross’s existing capital structure have been made.

Telecom has provided contingent credit support for up to US$105.7 million of the deferred loans and Optus has provided contingent credit support for up to US$45.3 million of the deferred loans. The contingent credit support exposure will reduce as further market sales are made and applied towards the repayment of the deferred loans.

In order to realign the levels of contingent credit support with Telecom’s and Optus’s respective shareholdings in Southern Cross, Telecom has priority in reducing the level of its contingent credit support, relative to Optus.

This priority is in respect of the first US$49 million worth of deferred loans to be repaid out of third party capacity sales and Southern Cross’s other surplus funds. As such, the first US$49 million of repayments from such sources will be applied solely to reduce Telecom’s contingent credit support exposure.

Beyond the first US$49 million of repayments, further deferred loan repayments from such sources will see Telecom’s and Optus’s contingent credit support exposure reduced proportional with their relative shareholdings. Telecom and Optus will each accrue support fees, payable by Southern Cross, commensurate with their respective levels of contingent credit support.

The current financing for Southern Cross was established in March 2001 with a US$950 million senior bank facility. As at 1 May 2003, Southern Cross will have repaid approximately US$586 million of the initial loan with cash receipts from the sale of capacity on the cable, and has further commitments of US$235.7 million from capacity sales.

Southern Cross is currently capitalised via US$30 million of shareholders equity and has US$120 million of shareholder advances and US$363.7 million of senior bank debt.

© Scoop Media

Business Headlines | Sci-Tech Headlines


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news