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Crown to return $11.4 million of TVNZ's dividend

8 November 2004 Media Statement

Crown to return $11.4 million of TVNZ's dividend

The Crown will return $11.4 million (plus GST) of Television New Zealand's $37.6 million dividend for 2003/04 as additional funding to implement its Charter, TVNZ’s shareholding ministers announced today.

Finance Minister Dr Michael Cullen and Broadcasting Minister Steve Maharey have agreed to a framework whereby the company can receive additional funding when its profits are in excess of its cost of capital.

"TVNZ is obliged to pay dividends because it is a commercial asset,” Dr Cullen said. “This framework provides appropriate incentives and rewards for the company. At the same time it ensures shareholders receive an adequate return on investment.”

The framework is consistent with other parts of the Crown's portfolio of assets, e.g. Crown Research Institutes, which are required to return their cost of capital to shareholders.

TVNZ must apply the additional funding to initiatives that are consistent with the implementation of the Charter. The $11.4 million will be included in a Memorandum of Understanding with the Ministry for Culture and Heritage. The Ministry monitors the spending of Charter funds.

Steve Maharey said the government wanted to maintain accountability for the funds being spent on implementing the Charter.

“This framework, whereby TVNZ pays dividends and receives Charter related funding, provides a robust, transparent method of apportioning the surplus funds.

"The arrangement is a clear signal to TVNZ that the government is committed to supporting its delivery on the Charter."

The funding is in addition to $16 million provided this financial year to assist Charter implementation and $17 million to be provided in 2005/06.

ENDS

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