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The Telecom Board has today proposed a capital return of $1.1 billion to shareholders following the sale of Yellow Pages Group (“YPG”).
Net proceeds of NZ$2.161 billion from the sale to a private equity consortium consisting of CCMP Capital and Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan were received on 30 April 2007.
The proposed NZ$1.1 billion capital return will be by way of a court sanctioned share cancellation which will be done on a pro-rata basis and is subject to court, shareholder and taxation authority approvals.
Telecom Chairman Wayne Boyd said the Board had considered the relevant interests of all stakeholders in determining the size of the capital distribution.
“Our intention is to maintain a balance sheet structure which has sufficient financial flexibility so that we can choose to invest where we see returns,” Mr Boyd said.
“Future investment in Telecom’s broadband and mobile networks is not fundamentally linked to the return from the YPG sale.
“Any further investment in broadband will be contingent on being able to obtain sufficient regulatory certainty and being able to earn a fair rate of return on that investment.
“Other relevant factors which have been taken into consideration include Telecom’s earnings outlook, and the acquisition of PowerTel in Australia.”
Mr Boyd said the Board is committed to maintaining “A’’ credit ratings and the capital management policies are designed to ensure this objective is met.
“Taking into account the approval requirements, the likely timing of the distribution would be late September 2007,” he said.
Mr Boyd reiterated that the YPG sale had represented a significant outcome for Telecom shareholders and the Board had been satisfied that the transaction fairly reflected the underlying value of the YPG business.
ENDS
For enquiries please call:
Phil Love
Head of External Media
Telecom
027 244 8496
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