Shareholders Approve Capital Return

At a special meeting in Wellington today Telecom shareholders approved a capital return of $1.1 billion through a Scheme of Arrangement.

The capital return follows the sale of the Yellow Pages Group and requires both Court and shareholder approval.

The capital return, if approved by the High Court, will see the cancellation of one share in every nine held by each shareholder on the record date - in return each Telecom shareholder will receive NZ$4.88 for every ordinary share of their holding that is cancelled.

The capital return required approval by at least 75% of the votes on the special resolution and Telecom Chairman Wayne Boyd said that the vote was 95.2% in favour of the resolution, therefore passed by the requisite majority.

"This is a positive outcome for both shareholders and the company and subject to receiving High Court approval we expect the transaction to be completed in October," Mr Boyd said.

"We will advise shareholders of the outcome of the High Court approval process in due course."

Now that shareholders have approved the Arrangement the following indicative timetable will apply:
By 7 September - High Court final order approving the Arrangement
* 7 September - payment of Telecom's fourth quarter dividend and issue of shares under the dividend reinvestment plan (except ADRs)
* 14 September - payment of Telecom's fourth quarter dividend (ADR holders)
* 21 September - record date of capital return
* 5 October - payment date for capital return (for shareholders)
* 12 October - payment date for capital return (for ADR holders)

DETAILS OF THE TOTAL NUMBER OF VOTES CAST WERE:

That there is hereby approved an arrangement for the return of capital to ordinary shareholders (the Arrangement) under which:

(a) one share of every nine ordinary Telecom shares registered in the name of each Telecom ordinary shareholder on the relevant record date shall be cancelled. Where the number of shares held by an ordinary shareholder is not divisible by nine then fractions of a share shall be rounded up or down to the nearest whole share; and
(b) Telecom shall pay to each holder of Telecom ordinary shares $4.88 for each ordinary share registered in the name of that shareholder which has been cancelled

subject to the Arrangement being sanctioned by the High Court of New Zealand pursuant to Part XV of the Companies Act 1993, further information about the Arrangement being contained in the Explanatory Notes accompanying the Notice of relevant Special Meeting.

For: 1,197,281,092
Against: 60,177,368 Abstain: 3,311,108

DETAILS OF THE PROXY VOTES WERE AS FOLLOWS:

Proxies

The special resolution as set out above.

For: 1,195, 003, 979
Discretionary Board proxies: 1,558,701
Discretionary other proxies: 187,205
Against: 60,129,368
Abstain: 3,281,108

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