Telecom: we can't split by June
Company runs out of time for Crown Fibre split.
Telecom says it has run out of time to split itself in two - or at least by its original target date of June 2011.
The telco has previously indicated that it could "demerge" into separately listed companies (one retail, one network), required as the price of participation in the government's $1.5 billion ultrafast broadband (UFB) Crown Fibre project, by mid-year.
This afternoon, chief executive Paul Reynolds said that timeframe was no longer possible.
The June timetable required Telecom to enter a a contractual arrangement with Crown Fibre Holdings for the UFB project by the end of last year.
On December 13, Telecom was named as a preferred bidder for 25 Crown Fibre regions, including unopposed runs at Auckland and Wellington, but negotiations with Crown Fibre Holdings are still ongoing.
If Telecom and Crown Fibre Holdings do reach an agreement, legislative changes will be required - although Communications Minister Steven Joyce has already laid the ground work for the necessary changes with the introduction of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill last month.
Shareholders and debt holders would also have to approve a split.
The announcement was made after the market closed.
Telecom shares (NZX: TEL) were up 0.44% to $2.28 today.
NBR staff
Wed, 19 Jan 2011
Wed, 19 Jan 2011
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Telecom: we can't split by June
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