Pacific Fibre boss rejects reports of 'failed funding', delays

Pacific Fibre chief executive Mark Rushworth rejects a report his company has failed to find funding.

This morning, the Australian Financial Review quoted un-named industry sources saying “the project is running behind schedule and may not be able to find the equity it needs to build the pipe.”

Founded by Rich Listers Sir Stephen Tindall, Sam Morgan and Rod Drury, Pacific Fibre is seeking to raise $US400 million to build a 12,950km fibre optic cable between Sydney, Auckland and LA – breaking the 50% Telecom-owned Southern Cross Cable’s monopoly as New Zealand’s only major broadband link to the outside world.

The company faces competition from a joint venture between Huawei Marine and Axin – backed by Chinese banks and telcos – which is planning a transtasman cable.

$170m in anchor customer contracts
Mr Rushworth said Pacific Fibre now had $170 million in anchor customer contracts - a total not previously revealed.

The total includes a $91 million commitment from government-owned broadband network operator Reannz, plus 10-year contracts with Vodafone NZ and iiNet (the largest independent ISP in Australia). Pacific Fibre has also secured a debt funding facility with ANZ. Up to 45% of the project could be funded by debt, Mr Rushworth has previously told NBR.

Meanwhile, Southern Cross Cable has cut its pricing, and added capacity - steps it says were always planned, not aimed at heading off competition.

The CEO said the cable would be fully financed “soon”, but would not give even a broad timeframe. “It will be funded when it gets funded,” Mr Rushworth said.

The AFR report was incorrect in saying Pacific Fibre would fail to get customers online next year.

The company had always aimed to go live in the first quarter of 2014, the CEO said (the date he has always given NBR in various interviews of the past couple of years).

The AFR was correct to say Pacific Fibre business development manager Mike Constable had departed.

Mr Constable left on March 9 to take a job in Singapore.

Mr Rushworth said this was because Pacific Fibre was moving beyond its initial focus on funding to hiring staff for the build phase of the cable.

Pacific Fibre is actively recruiting for three senior project management and engineering staff, who would world with build partner TE Subcom.

TE Subcom recently completed a “permitting study” of for the Pacific Fibre cable company and its planned landing points – a precursor to seeking resource consents.

“It will get financed and built,” Mr Rushworth said.