Wednesday 14th September 2011
|Text too small?|
Telecom Corp. has gained approval from holders of two issues of British pound-denominated bonds to exchange the securities for notes in its Chorus network business once New Zealand’s biggest phone company is split in two.
Consent was required because the demerger may have resulted in a default event under the terms of the bonds’ trust deed.
The Auckland-based company said it had consent from the required 75% of the holders of its 125 million pounds of 2018 notes and 150 million pounds of 2020 notes to exchange the debt for Chorus bonds maturing in 2020.
Bond holder consent is but one part of the approvals process for Telecom, whose shareholders are to vote on the plan at their annual meeting in October.
Telecom released documents yesterday showing that splitting the company into its retail and network businesses may cost as much as $150 million.
Those costs are outweighed by the benefits of Telecom splitting its business, letting the new retail arm shed its regulatory burdens and providing Chorus with a $929 million injection to build the majority of a nationwide broadband network, the papers say.
Independent adviser Grant Samuel said the value of cooperating with the government and carving up the business was some $500 million, or 28 cents per share, in its report on the demerger.
Telecom shares fell 0.4% to $2.505 on the NZX today.
No comments yet
Telecom Corporation of New Zealand (TEL)
Telecom in drive to latch on to growing data usage with 4G mobile launch next month
Telecom lines up to buy 700MHz spectrum to extend reach of 4G network
Telecom backs setting copper prices until 2020, warns against getting too far away from input cost
Telecom puts $60M price tag on new Auckland data centre, Hawkins, AECOM win build
Telecom ends jobs purge, looks for ‘more sophisticated’ ways to save money
Telecom FY earnings fall to bottom of guidance range, sees unchanged dividend in 2014
Telecom takes spat with Vodafone to regulator after dropping court action
Telecom unbundling key to regulator's copper conundrum
Telecom lures customers to faster services in EPL deal