Chorus plans underwrite for dividend reinvestment programme
By Paul McBeth
Sept. 21 (BusinessDesk) - Chorus is going to underwrite its dividend reinvestment programme, issuing shares to the underwriter at the 3 percent discount for the portion not taken up by shareholders.
The Wellington-based telecommunications network operator's board declared a final dividend of 12.5 cents per share last month, payable on Oct. 10 to shareholders on the register at the close of trading on Sept. 26. At the time, chief executive Kate McKenzie and chair Patrick Strange said the dividend reinvestment programme had been popular and would be available to help the company retain cash.
Chorus today said it plans to enter into an underwriting agreement, issuing shares not taken up in the programme on the same terms, although a spokesman said the deal hasn't been finalised and didn't name the potential underwriter. The dividend reinvestment programme price will be announced on Oct. 2.
The company's programme had an uptake of about 45 percent in recent payments. At that rate, the underwriter would buy about $28.3 million of shares.
Chorus had cash and equivalents of $170 million as at June 30, generating a cash flow of $524 million in the year from operations, compared to $435 million a year earlier. The company's capital expenditure was $639 million in the 2017 financial year, which it sees rising to between $780 million and $820 million in the year ending June 30, 2018 as it steps up the pace of work on the expanded national fibre network roll-out.
The company also updated connection numbers today, saying there had been a moderation in the monthly decline of fixed lines, while broadband connections were largely stable. Chorus had 1.59 million fixed line connections as at Aug. 31, down from 1.6 million as at June 30, while broadband connections edged down to 1.18 million from 1.19 million.
Chorus shares slipped 0.3 percent to $4, having increased 1 percent this year.