Spark completes restructure of Southern Cross
Spark completes restructure of Southern Cross to proceed with SX Next build
7 October 2019
Southern Cross Cable Network and its shareholders have now signed agreements and received regulatory approval for the build of the NEXT undersea data cable (SX NEXT), a new approximately US$300m internet cable between New Zealand, the United States and Australia.
Russell McVeagh acted for Spark New Zealand as the majority shareholder in the deal, leading complex negotiations over a period of nearly two years with other shareholders and Southern Cross to restructure the Southern Cross group, put in place arrangements for the financing and construction of the new cable, and onboard Telstra as a new customer. The deal will make Telstra a 25% shareholder of Southern Cross and an anchor customer of SX NEXT.
The Russell McVeagh team was led by Corporate partner Ian Beaumont, and included Lucy Clifford and Stephanie Russell (Corporate), Tom Hunt, Bevan Peachy and Che Ammon (Banking and Finance), Brendan Brown and Chris Harker (Tax) and Troy Pilkington (Competition).
Spark NZ expects to contribute a total of between NZ$70m and NZ$90m of equity in the NEXT cable, which will provide it with owners economics for international bandwidth and greater certainty of supply should demand for data grow faster than expected. The cable will be able to carry 72 terabits of data per second – more than three times the capacity of its existing network – and will also provide connections to Fiji, Tokelau and Kiribati.
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.