Vocus Group (ASX:VOC) has moved to reassure its shareholders over the proposed sale of its New Zealand assets, after reports emerged that the sale price could be well below what was previously expected.
On 27 March, News Corp’s The Australian reported that the Australian-listed telco is believed to be close to finalising a deal that would see its NZ assets sold to Trustpower for around A$250 million.
Trustpower, which is listed on the New Zealand stock exchange, is a New Zealand-based gas, electricity and internet provider.
As noted by the News Corp publication, the rumoured value of the potential sale falls well below the A$400 million that the sell-off of Vocus Group’s NZ assets was previously thought to be worth.
Now, Vocus Group has told shareholders that it is in discussions with a number of parties and has made no comment on the value of the assets.
“Vocus Group Limited…notes media speculation today, regarding the possible sale of its New Zealand assets,” the company said in a statement lodged with the Australian Securities Exchange (ASX) on 27 March. “Vocus confirms that it announced to the market the proposed sale of its New Zealand assets on 23 October 2017.
“While it is not Vocus policy to comment on speculation, Vocus confirms that, as stated in its interim results release on 20 February 2018, the sale process is progressing to the planned timeline with target completion by June 2018 (subject to regulatory approvals, if required).
“The New Zealand business is a strong business and attractive asset that will only be sold if it achieves an appropriate return for our shareholders,” it said.
As stated by Vocus, the telco said in an investor update issued on 23 October last year that its board had determined that the Vocus New Zealand (VNZ) business would be prepared for sale.
“The company is now finalising the appointment of advisors and is aiming to complete a sale by the end of the 2018 financial year,” it said at the time.
The move came after an announcement in August last that the company would undertake a review of non-core Australian assets for potential divestment options.
In October, the company also revealed it had progressed its review of the non-core Australian assets, and had appointed advisors for the sale of its Australian data centre assets.
“Other non-core Australian assets will continue to be evaluated with regard to potential divestment or disclosure,” it said at the time.
In February, the publicly-listed telco told shareholders that Geoff Horth would leave the company as its CEO, after he and the company came to a “mutual agreement”.
The role of interim group CEO was subsequently taken by Vocus current chief executive of wholesale and international division, and previous chief executive of the former Vocus enterprise and wholesale division, Michael Simmons.
Just days before Vocus revealed that Horth would step down as CEO, the company downgraded its full-year earnings forecast by between $5-$10 million, citing headwinds faced by its consumer division.