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Vocus drops plans to sell New Zealand business Featured

The Vocus Group says it has dropped plans to sell its assets in New Zealand and has ended talks with all parties that had expressed an interest in buying its New Zealand business.

The company said in a statement on Tuesday that its board had concluded that cancelling sale plans was in the best interests of its shareholders.

Vocus, Australia's fourth largest telecommunications outfit, was rumoured to be mulling a sale of the NZ assets to New Zealand power and Internet provider Trustpower for about $250 million.

The Australian made the claim about Trustpower in March.

Vocus had made an announcement in October 2017 that it was readying the NZ business for sale and targeting a completion of the same by the end of the 2018 financial year.

But this morning, the company said though it had received multiple offers for Vocus NZ, none "appropriately reflected the fundamental and strategic value of Vocus NZ nor provided sufficient certainty of funding and execution".

Chairman Bob Mansfield said: “Vocus NZ is an excellent business with strong leadership, an attractive growth profile, a clear competitive position and a track record of delivering solid returns on capital. The board intends to continue to invest in and grow Vocus NZ to enable that business to realise its strategic potential for shareholders."

The company also provided an update on its debt refinancing, saying that its lending syndicate would extend the period for it net leverage ratio cap of 3.5x to 31 December. A ratio of 3.0x would apply from 30 June 2019 onwards.

It also said its refinancing plans were progressing and that it expected to complete its facility refinance plans by the end of the current financial year.

Mansfield said: “The board would like to thank our bank group for their strong support shown to date. We are comfortable that the increased financial capacity and covenants that will be sought through the refinancing will provide sufficient financial flexibility for the company to complete its strategic and transformation initiatives over the next few years."

Vocus said based on its existing cash flows, it expected the debt ratio to peak in the first half of FY19 and then reduce progressively.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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