2degrees shareholder eyes growth in NZ

Wireless communications provider Trilogy International Partners LLC, plans to sell $US370 million ($NZ501.8m) of senior secured notes to refinance debt and finance growth in New Zealand, according to Moody's Investors Service.

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The Seattle-based Trilogy is the majority shareholder of mobile phone network company 2degrees. It recently gained OIO approval to lift its stake above 50%, with the Hautaki Trust stake being diluted in the process (read: US investor cleared to take 100% stake in 2degrees; company value revealed).

Documents recently filed with the Companies Office revealed that 2degrees lost $51.7 million, or one million a week, for the 12 months to December 31. However, the company only traded from August.

Moody's rated the notes Caa1, it said in a report.

S&P rated the debt an equivalent CCC+. The notes are expected to have a maturity of six years, though terms have not yet been set.

Last year, Trilogy increased its shareholding in 2degrees from 26 per cent to 52 per cent, while Hautaki, a pan-Maori investor, was forced to dilute its stake from 20 per cent to around 13 percent after being able to raise only $4 million of $20m needed new equity to hold its position.

The Labour- Alliance government in 2000 encouraged a pan-Maori trust, Te Hauarahi Tika, to hold 3G spectrum rights as a way of boosting Maori participation in the "knowledge economy". Hautaki was set up as the trust's trading arm.

By the end of 2000, Hautaki had joined up with South African company Econet with the intention of launching a mobile network. The entity, Econet Wireless, became NZ Communications, of which Hautaki owned 30 percent.

Mid-last year Trilogy bought out Econet's interest.