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


Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>


Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>


CO2 And Water: Fonterra's Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>


Fisheries: Decision To Delay Monitoring ‘Fatally Flawed’

Conservation group representatives say a decision by the new Minister of Fisheries, Stuart Nash, to delay implementation of camera monitoring of fishing efforts in New Zealand is ‘fatally flawed’. More>>


Kaikōura Quakes: One Year On

State Highway One and the railway were blocked by damage and slips and the Inland Road suffered significant damage. Farms, homes and businesses suffered building and land damage. Power and internet went down, drinking water systems, sewage systems and local roads were all badly affected... More>>