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

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news