Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Agreements signed for build of new Southern Cross NEXT cable

1 October 2019

In line with updates provided as part of Spark New Zealand’s annual results announcement on 21 August 2019, the Southern Cross Cable Network (Southern Cross) and its shareholders have now signed agreements and received regulatory approval for:

Telstra to become a 25% shareholder of Southern Cross and an anchor customer of the Southern Cross NEXT undersea data cable (SX NEXT); and
· The build of SX NEXT to proceed.

As previously announced, SX NEXT has been developed as an extension of the existing Southern Cross cable ecosystem and when completed is expected to be the lowest latency path from Australia and New Zealand to the United States.

The transaction will complete subject to certain conditions being satisfied. These are procedural in nature and are expected to be satisfied within the next few days.

Build costs for SX NEXT are expected to be approximately US$300m and will be funded via a combination of:

Debt held by Southern Cross;
Retention of dividend streams from the existing cable network during the build phase – with no dividends expected to be received from Southern Cross in FY20 and FY21; and
Further equity investment by Southern Cross shareholders.

As a consequence of Telstra becoming a Southern Cross shareholder, Spark’s shareholding in Southern Cross will be diluted from 50% to approximately 40%. Depending on the level of SX NEXT pre-sales that are secured, Spark expects to contribute a total of between NZ$70m and NZ$90m of equity across FY20, FY21 and FY22; with this investment providing Spark with:

Owners economics for international bandwidth, which will continue to be a critical component of the telecommunications infrastructure serving New Zealand homes and businesses;
Greater certainty of supply should demand for data grow faster than expected; and
Strong long-term returns, with dividend receipts from Southern Cross expected to resume from FY22.

- ENDS –

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>

ALSO:

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:



Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: