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2degrees ASX float gathering pace

NZ NewswireNZ Newswire 3/05/2016 Pattrick Smellie

Australian media reports suggesting New Zealand's third-placed mobile operator, Two Degrees, will seek to raise between $100 million and $150 million in a float on the ASX in the next few months have the implicit support of the company.

While no decisions have been made, a 2degrees spokesman said in response to questions about the report in The Australian newspaper that "the background for us is it's a growth business and our board is always looking at ways to accelerate the business with new capital."

"We have the funding we need, but there are things we're thinking about that would take us to another level," said Mat Bolland, the Auckland-based operator's director of corporate affairs, who referenced 2degrees' purchase last March of the Christchurch internet service provider, Snap, to allow it to offer broadband and fixed-line telephony over the internet. No purchase price was disclosed for that transaction.

"We can't detail those (initiatives) or how we might fund them, whether by IPO or something else," said Bolland.

The company is expected to release its annual earnings result for calendar 2015 around the end of this month.

Its annual losses have been narrowing in line with its plan. It posted a 2014 loss of $33.6 million, from a $35.9 million loss in 2013, as revenue grew 29 per cent to just under $400 million.

The Australian reported that banks pitched for a lead manager role three weeks ago, with Deutsche Craigs, UBS, Macquarie Capital and First NZ Capital in the mix.

The current shareholders of 2degrees are US-based venture capital firm Trilogy International Partners with 58 per cent, 27.1 per cent in the hands of London-based Venture Communication Partners, 10.2 per cent with New Zealand Maori investor Te Huarihi Tika Trust, and the remainder with KLR Hong Kong.

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