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

 


Chorus makes first draw-down on govt UFB fund

Chorus makes first draw-down on govt UFB fund

By Paul McBeth

April 12 (BusinessDesk) – Chorus, the fibre network company spun out of Telecom, has made its first draw-down on the government’s ultra-fast broadband programme funding to build high-speed internet links in Auckland’s Albany and Rosebank areas.

The Wellington-based company received some $3.9 million from Crown Fibre Holdings, the entity tasked with overseeing the network roll-out, to pay for the extension of high-speed internet services to about 3,400 premises, it said in a statement. Chorus issued some 1.9 million equity securities and 1.9 million debt securities at $1 apiece, and also issued 83,000 warrants for nil consideration to complete the transaction.

Under the terms of the deal, the number of securities issued is calculated on the basis of $1,118 for each premise Chorus passes with the UFB network, split 50/50 between debt and equity.

The equity securities don’t carry voting rights, and entitle the government to receive dividends after 2025, equal to the 180-day bank bill rate plus a margin of 6 percent per annum. Chorus isn’t obliged to declare dividends, but it can’t pay a return to holders of its regular stock without paying out on the CFH securities.

The debt securities are unsecured and don’t bear interest. Chorus is required to redeem them in tranches from 2025 to 2036 at the latest, though if uptake isn’t as fast as expected it will have to repay the debt at a faster pace.

The warrants let CFH participate in any upside to Chorus’s stock if the shares exceed total shareholder return of 16 percent per annum, with the exercise dates expected between 2025 and 2036.

Chorus can tap the government agency for up to $929 million to build the national network in a deal that differs from other arrangements in that the network company receives the investment directly rather than through a local fibre company. In the Telecom demerger document, the company flagged it will draw down $167 million in the 2013 financial year.

The former Telecom unit won the bulk of the government’s $1.35 billion plan to roll-out a nationwide broadband network last year, after the phone company agreed to carve out Chorus as a separate entity.

Shares in Chorus slipped 0.3 percent to $3.44 in trading yesterday, and have climbed 17 percent since listing in November.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news