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

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

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