Telecom's retail bondholders overwhelmingly approve split
Telecom's retail bondholders have overwhelmingly voted in favour of it spinning off its Chorus network business into a separate company.
Friday, September 30th 2011, 4:37PM
by Jenny Ruth
Of those voting, 99.9% were in favour - holders of only 3,000 bonds voted against while holders of 435.4 million voted in favour.
For a vote of debt holders, Telecom managed a spectacular turnout of 80% of holders of the $541.7 million in bonds.
Last month, a lack of quorums meant PGG Wrightson had to adjourn its first meetings of debt holders to vote on its finance business being sold to Heartland New Zealand and the same thing happened at all the meetings of debt holders during the formation of Heartland New Zealand last year.
One reason Telecom achieved such a high turnout was the 0.5% one-off "consent fee" it offered bondholders who voted in favour - those who either didn't vote or voted against the split won't be receiving the sweetener which Telecom raised from the originally proposed 0.25% fee.
Bondholders have also been given protection against credit rating downgrades in the form of higher coupon payments.
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