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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news