Sky notes launched

By Phil Boeyen, ShareChat Business News Editor

Monday 17th September 2001

Pay TV operator Sky (NZSE: SKY) will be hoping it can repeat the fully subscribed note issue completed last week by Guinness Peat Group (NZSE: GPG).

Sky officially opened its capital raising Monday although it began advertising the issue over the weekend.

The company is looking for up to $125 million in unsecured capital at a minimum rate of 9.3% a year. The GPG notes, which received subscriptions from more than 7,500 investors, were paying 9%.

The capital notes issue is conditional on shareholder approval, and shareholders will be offered preferential allocation.

Sky says the money raised will be used to augment existing banking facilities, pay down existing bank debt, continue to expand its customer base and offer new services to subscribers.

The company is finding success in growing its customer base, with nearly a third of all New Zealand households now subscribing to the service.

However that growth not does come cheaply, as reflected in the company's recently announced $42 million loss to the end of June. This figure included depreciation of $95.4 million, partly from installation costs such as decoders, smart cards, antennae and installation labour.

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