UPDATED 2PM: State-owned company books write-down on early digital TV switchover; spends heavily projects including the Orcon Genius and onKor IP network.

Kordia's OptiKor cable would link to a cable already under construction by the SOE's putative Australian partner, Pipe Networks, which runs up to the US via Guam. Pipe has already built a spur out Sydney ready to take Kordia's cable. Kordia says the Guam route will be a gateway into Asia, bypassed by the rival, 50% Telecom-owned Southern Cross Cable which runs to the US via Hawaii.

Progress on the trantasman submarine cable will leap ahead over the next six months, Kordia chairman David Clark announced today.

Mr Clark said the new cable would reduce New Zealand’s connectivity risk on international routes to Australia and further a field. The OptiKor cable is set to lower prices for New Zealand businesses and broadband users.

In the wake of government funding being yanked, the SOE’s strategic development manager prepares to take to take a business case to Kordia’s board.

With Kordia heavily-geared, chief executive Geoff Hunt has ruled out bank loans to fund a transtasman cable, which is estimated to cost around $200 million.

Heavily-geared state-owned enterprise Kordia has made another acquisition with its ISP, Orcon, picking up New Zealand’s second largest website hosting company, iServe.

Orcon announced today it has bought iServe for an undisclosed sum. The deal took effect on May 1.

While no official league tables are kept, iServe founder and general manager Joy Cottle tells NBR her company is the second largest web host in the country behind Iconz, owner of Freeparking and Webfarm.

The timing couldn’t be worse: just as the government sends a letter calling SOEs to account, state-owned Kordia slips into the red, and breaches banking covenants as debt surges to $125 million.

In its interim result for the six months ended December 31, 2008, Kordia made a pre-tax loss of $5.77 million, (after tax $9.47 million) compared to a pre-tax profit of $7.76 million for second half of 2007.