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CHORUS LIMITED — Capital/Financing Update 2013
Nov 17, 2013
64680_rns_2013-11-17_7f2e7ae5-610a-40ca-a899-e235b5acd1de.pdf
Capital/Financing Update
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Chorus Limited Level 9 Datacom House 68-86 Jervois Quay P O Box 632 Wellington New Zealand Email: [email protected]
STOCK EXCHANGE ANNOUNCEMENT
18 November 2013
Chorus withdraws dividend guidance
In light of the ongoing regulatory uncertainty facing Chorus, including the outcome of the Government’s independent review, Chorus has elected to withdraw its FY14 dividend guidance of 25.5 cents per share.
“At this time of unprecedented levels of investment by Chorus, withdrawing dividend guidance is a regrettable but necessary step in light of the ongoing uncertainty Chorus faces,” said Mark Ratcliffe, Chorus CEO.
Chorus is investing roughly three dollars in the Ultra-fast Broadband initiative for every dollar of financing provided by the Crown to support the delivery of the upgraded infrastructure, which is of critical importance to New Zealand’s future.
“We are proud of our role as the cornerstone partner in the Ultra-fast Broadband initiative, which is being delivered like clockwork.”
“We remain hopeful that as the major partner in New Zealand’s largest public private partnership we can work with the Government to find a timely solution to the current issues that works for all parties and provides Chorus and its investors with the certainty we need to get on with delivering this once in many generations infrastructure upgrade.”
Background
The Chorus Board noted in August that it intended to reassess Chorus’ optimal capital management settings when the outcomes from the Government’s regulatory framework review were known.
Following the Commerce Commission’s decision on 5 November which reduces UBA prices by 49% from 1 December 2014, Chorus announced that absent intervention by the Government, it would need to fundamentally review a range of key matters.
On 7 November the Minister for Communications and Information Technology announced an independent review of the impact of the Commerce Commission’s decision on Chorus’ financial position and capability to deliver on its contractual commitments under the Ultra-Fast Broadband and Rural Broadband Initiatives. The
Minister also requested that Chorus advise by 18 November (today) what steps it intended to take in relation to capital management options.
As there is ongoing uncertainty regarding the outcome of the Government’s review and related matters, Chorus has elected to withdraw its FY14 dividend guidance. Chorus is continuing to review its capital management settings as regulatory and other key matters are progressed. It is not feasible at this point for Chorus to comment on what other capital management changes might be appropriate.
Chorus looks forward to assisting and co-operating with the Government’s independent adviser on the assessment of the impact of the Commerce Commission’s decisions.
ENDS
For further information:
Ian Bonnar Corporate Affairs Manager Phone: +64 9 358 6061 Mobile: +64 (27) 215 7564 Email: [email protected]
Brett Jackson Investor Relations Manager Phone: +64 4 498 9271 Mobile: +64 (27) 488 7808 Email: [email protected]
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