Telecom taps former general counsel Verbiest as new chairman

Tuesday 13th September 2011

Telecom Corp. has tapped its former lawyer Mark Verbiest to head up a new board once the phone company carves itself in two.

The Auckland-based company has appointed Transpower chair Verbiest to replace outgoing chairman Wayne Boyd, who is to step down after the demerger is completed, it said in a statement. Boyd and Ron Spithill will step down from the board, as will Sue Sheldon who shifts to Chorus as chair.

“The board believes that Mark Verbiest is the right man to lead the stewardship of the interests of shareholders as Telecom addresses the opportunities and challenges after a demerger,” Boyd said.

Fellow Telecom directors Kevin Roberts and Murray Horn will stand for re-election at next month’s annual meeting. Chief executive Paul Reynolds, whose $5.2 million pay packet was unveiled just before the Rugby World Cup festivities kicked off, will stay on the board. Reynolds plans to leave the company once the split is bedded in.

Joining Verbiest are investment banker Charles Sitch, NZ Post deputy chair Justine Smyth, Transpower director Maury Leyland and Hong Kong telecommunications company PCCW’s chief technology officer Paul Berriman.

The announcement comes as Telecom releases shareholder information about the proposed demerger, which investors still have to approve.

The phone company won the lion’s share of the government’s broadband rollout after proposing structural separation in a bid to shed the heavy regulatory burden of operating a copper-line network monopoly, and win tax-payer funding to build a nationwide fibre network.

That bid was successful, and Chorus won $929 million of the $1.35 billion on offer from the government to roll-out an ultra-fast broadband network. Chorus expects it will have to spend $470 million and $670 million of its own money over the next eight years on construction.

Once the split is complete, New Telecom will be the bigger of the two companies, with adjusted pro-forma earnings before interest, tax, depreciation and amortisation of $1.125 billion on $5.1 billion of sales in the 12 months ended June 30, while Chorus made $676 million on $1.1 billion of revenue.

The shares fell 2% to $2.465 in trading yesterday, and have climbed 16% this year.

(BusinessDesk)

BusinessDesk.co.nz

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