Bank of New York Mellon trims holding in embattled Chorus
Bank of New York Mellon Corp, which has US$1.5 trillion of assets under management, has reduced its holding in Chorus after the telecommunications network company said it would be hurt by the regulator's decision to lower the price it can charge retailers for its copper-based broadband service.
New York-based BNY Mellon, which is also the world's largest custody bank with US$27.4 trillion in assets under custody, reduced its holding in Chorus to 6.3 percent from 7.45 percent on Dec. 4, according to a substantial security holder notice posted on the NZX today.
Chorus shares have plumbed new lows after Telecommunications Commissioner Stephen Gale ruled the wholesale price Chorus can charge for its copper-based broadband services should be cut by 23 percent. Chorus has said the pricing cut would force an overhaul of its capital structure as its earnings may be slashed by $142 million a year meaning it may not pay its forecast dividends in 2014.
Shares in Chorus touched a record low $1.36 yesterday and last traded at $1.38, having lost more than half their value this year.
Chorus is in talks with Crown Fibre Holdings, which oversees the government contract with the company to build a national fibre network, to see if they can find contractual redress to mitigate the impact of regulated price cut.