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- Release Date: 16/12/13 10:30
- Summary: GENERAL: CNU: Trade-offs will be weighed carefully to protect consumers
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CNU
16/12/2013 08:30
GENERAL
REL: 0830 HRS Chorus Limited (NS)
GENERAL: CNU: Trade-offs will be weighed carefully to protect consumers
Chorus has today said that the findings of the Ernst and Young (EY)
'Independent Assessment of Chorus' Financial Position' confirm Chorus' own
assessment of a $1bn funding gap by 2020.
The report also states that EY's view is that following the initiatives
Chorus could undertake alone a significant funding gap would still remain,
meaning that Chorus would be unlikely to be able to meet all of its forward
commitments without external support.
As requested by the Minister, Chorus has engaged with Crown Fibre Holdings,
which has been nominated as the Crown's agent, to discuss options.
"The report aligns with our market disclosure of 5 November and the
information provided to shareholders in the letter from the Chairman earlier
this week," said Chorus CEO Mark Ratcliffe.
"EY has also identified a range of potential revenue, cost and
investment-related initiatives that Chorus could undertake in order to
partially address the funding gap, and they correctly identify that those
initiatives come with substantial trade-offs.
"These initiatives must be weighed very carefully, as while they may save
money that can then be invested into UFB, they also have the potential to
negatively impact service levels and broadband services for consumers across
New Zealand on the current network. The right balance must be struck to
ensure New Zealand consumers continue to benefit from high quality
infrastructure today and into the future."
Chorus also noted that in addition to the original terms of reference for the
report, EY has also proposed some potential capital management options.
"While EY has provided a high level view on some potential capital management
scenarios, our view is that the true cost and viability of those options is
incomplete. As stated in Chorus' letter to shareholders this week,
discussions with Crown Fibre Holdings need to be completed before we finalise
our medium term strategy, which will include future capital management
settings."
A copy of the Minister's media release and the EY report is attached.
ENDS
For further information:
Ian Bonnar
Corporate Affairs Manager
Chorus
[email protected]
+64 27 2157 564
Brett Jackson
Investor Relations Manager
Chorus
[email protected]
+64 27 488 7808
End CA:00245187 For:CNU Type:GENERAL Time:2013-12-16 08:30:04
