Australian fund manager L1 Capital cashes in Chorus shares

Friday 24th July 2015

Australian fund manager L1 Capital has cashed up its stake in local telecommunications network operator Chorus, booking a 34 percent gain over the past year.

The Melbourne-based firm sold 7.9 million shares for A$19.7 million on July 22, an average price of about A$2.48 per share, and reducing its stake in the dual-listed Chorus to about 3 percent, which is below the 5 percent threshold that makes it a substantial shareholder, according to a notice filed with the stock exchange. L1 bought 6.4 million shares for A$11.8 million in August last year, an average price of A$1.85, which lifted its holding to 5.03 percent of Chorus.

The shares were down 0.2 percent at $2.835 on the NZX, and last traded at A$$2.59 on the ASX.

L1's 34 percent return from the sale compares to an 11 percent gain in New Zealand's S&P/NZX All Index and a mere 1 percent increase in Australia's S&P/ASX 200 Index over the same period.

The Australian equity investor lifted its stake in Chorus after the network operator had been upgraded to a 'buy' rating by UBS analysts, who expected the company to retain its fundamental value as it emerged from the regulatory cloud looming over it.

Earlier this month, the Commerce Commission retained its view on how much Chorus can charge retailers for access to its regulated copper line service, while changing its mind on whether to let the network operator backdate changes to its prices, which would see its biggest customers - Spark New Zealand and Vodafone New Zealand - have to fork over the difference.

The regulator will make a final decision in December.

BusinessDesk.co.nz

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