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

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news