Latest news with #JolieHodson
Scoop
3 days ago
- Business
- Scoop
Spark sells majority stake in data centre arm
In this newsletter: Spark sells 75 percent of data centre business Motorola releases range of satellite ready handsets RCG wins social impact award One NZ climate goals get international backing Pacific Equity Partners takes majority data centre stake Australian private equity firm Pacific Equity Partners (PEP) has purchased 75 percent of Spark's data centre business. The transaction is made up of $486 million in cash and an additional $98 million if the business meets performance targets by the end of 2027. Spark says it will use the money to pay down debt. The deal values Spark's data centre business at around $700 million. Spark CEO, Jolie Hodson, says, 'Through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25% retained stake – creating further value for our shareholders over the long term.' Standalone data centre business Hodson says Spark's data centre assets and operations will be moved into a new standalone business. Its working title is DC Co. The new firm will have its own board, management team and finance. Private equity firms like PEP rarely hold on to assets long-term. Which suggests it could prepare the business for a future trade sale. For now, DC Co has 11 data centre sites across New Zealand and 23MW of capacity. There are advanced plans for a new development at Dairy Flat on Auckland's North Shore and extensions at the company's Takanini site in South Auckland. New Zealand data centre projects On paper there is a wave of investment in new data centres in New Zealand although some projects appear stalled. AWS formerly promised it would open a major data centre in 2024. It has yet to deliver and there are reports work at the site has halted. Meanwhile DataGrid's planned $2 billion investment in a Southland site along with a new submarine cable is still waiting for its resource consent. For Spark, the deal is an opportunity to reduce the company's $2.7 billion telcos like Spark have struggled to remain profitable in the last two decades. Digital services mean the lucrative parts of the business are hollowed out as customers switch to cheaper alternatives. Meanwhile, regulatory and government pressure to make telecommunications more competitive mean lower margins in mobile and broadband. When Spark first announced it was looking for a data centre partner in February, Spark chair Justine Smyth warned: 'The scale and pace of deterioration in trading conditions we have experienced over the last year has been substantial'. Motorola introduces mobiles with One NZ satellite support motorola edge 60 fusion. One NZ has begun selling four new Motorola mobile phones. All models are 4G and 5G compatible and can work with One's direct to mobile satellite service. The top of the line motorola razr 60 is a $1400 flip phone. Also new this week are Motorola's $800 edge 60 fusion and the $1300 edge 60 pro. The company bills it $430 moto g56 5G as a 'no fuss, durable phone'. Also on sale at One NZ is the $226 moto g05. In 2016 the Motorola brand was picked up by Chinese computer maker Lenovo. Until last year the brand has been invisible in New Zealand although it was once a popular brand with models such as the moto x. One of the features that stands out is the phone's te reo Māori functionality and a fully localised te reo user interface. In other news... Vital presses remaining shareholders to back Tait Communications takeover — BusinessDesk (behind paywall) Finish line in sight for $770M rural connectivity programme — Reseller News Fifa World Cup rights could help TVNZ achieve pay-TV goal — The Post Australian court rules Apple and Google app stores are uncompetitive — Australian Financial Review The end of the line for AOL's dial-up internet service — The Guardian RCG's Ian Hooker, CEO, Steven Waters, Allison Bailie and Caitlin Metz with the Social Impact Award. RCG wins infrastructure social impact award The Rural Connectivity Group won Infrastructure New Zealand's 2025 Social Impact Award. The network-builder earned the award for its work bridging the urban-rural digital divide. Set up by Vodafone (now One NZ), Spark and 2degrees as a joint venture, the RCG has built 563 new mobile towers in rural areas and along regional highways. Its work even extends to the Chatham Islands. The RCG has connected 33,000 homes to modern communications technologies including broadband. In many cases users have a choice of service provider. One NZ climate targets gain global validation Science Based Targets initiative (SBTi) has verified One NZ's greenhouse gas reduction targets. The SBTi confirms the company's approach aligns with the 1.5°C warming pathway under the Paris Agreement. One is the first New Zealand telco to commit to absolute near-term cuts for Scope 3 emissions. The company says it cut combined Scope 1, 2 and selected Scope 3 emissions by 64 percent in the 2025 financial year. This include a 94 percent drop in electricity-related emissions after switching to renewable electricity. It says AI-powered network optimisation saved 16 gigawatt hours of electricity. One NZ's targets include cutting Scope 1 and 2 emissions by 42% percent and Scope 3 emissions by 42 percent by 2030. It aims to moving to 100 percent renewable electricity use over the same period. Five years ago: N4L checks school networks before exams New Zealand's NCEA exams moved online as a response to the Covid-19 pandemic and Network for Learning offered to help schools check their internet connections were up to the task. Auckland was in lockdown which meant another data traffic peak on the Chorus network. One year ago: ComCom report charts Starlink impact The Commerce Commission's 2024 Monitoring Report focused on the profound impact SpaceX's Starlink satellite broadband network had on rural communications. Share Download Weekly — Feel free to pass this email on to your colleagues. Have your say. If you're a subscriber, you can comment on any newsletter or story on the website. Just scroll to the bottom of the page. Reader emails are also welcome. The Download Weekly is supported by Chorus New Zealand. Spark sells majority stake in data centre arm was first posted at
Time of India
7 days ago
- Business
- Time of India
Spark NZ to sell 75% of data centre business in deal valued at $419 million
Spark New Zealand said on Tuesday it will sell a 75% stake in its data centre business to Australian fund manager Pacific Equity Partners , valuing the business at up to NZ$705 million ($418.63 million). The telecom company expects to receive approximately NZ$486 million in cash proceeds from the transaction. The company said that bringing on Pacific Equity as a capital partner will secure funding for planned data centre capacity expansion. Spark will retain a 25% stake to maintain its presence in New Zealand's growing market for AI infrastructure. The data-centre assets and operations will be transferred into a new stand-alone company, provisionally named "DC Co," with its own management team and financing facilities. Chief Executive Jolie Hodson said DC Co has "advanced plans in place" for a greenfield site on Auckland's North Shore and for further expansions at the Takanini site in South Auckland.
RNZ News
11-08-2025
- Business
- RNZ News
Spark to sell 75% stake in data centre to Pacific Equity Partners
Spark is selling a 75 percent stake in its data centre business to Pacific Equity Partners. Photo: RNZ / Kim Baker Wilson Telecommunications company Spark is selling a 75 percent stake in its data centre business for $705 million. Private capital investor Pacific Equity Partners was expected to help Spark secure the funding necessary to meet growing demand for data storage and computing. "Through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25 percent retained stake - creating further value for our shareholders over the long term," Spark chief executive Jolie Hodson said. Spark expected to receive cash proceeds of about $486 million at completion of the sale, with deferred cash proceeds of up to $98m contingent on the achievement of certain performance-based objectives by the end of the 2027 calendar year. Proceeds will be used to reduce Spark's net debt. Hodson said Spark will move its data centre assets and operations into a new stand-alone company, which was currently 'DC Co', which will have its own board, management team and debt financing facilities. "DC Co has a leading data centre platform in a growing market, with over 23MW of built capacity at 11 operating data centre facilities across New Zealand, and advanced plans in place for a greenfield development on Auckland's North Shore, as well as further extensions at the Takanini site in South Auckland," she said. PEP managing directors Andrew Charlier and Evan Hattersley said in a statement the investment aligned with PEP's growth strategy. "With PEP's backing and Spark's partnership, DC Co is positioned for transformative growth, delivering essential infrastructure that will support cloud and AI adoption and data sovereignty in New Zealand," they said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Yahoo
24-02-2025
- Business
- Yahoo
Spark New Zealand Ltd (NZTCF) (HY 2025) Earnings Call Highlights: Strategic Partnerships and ...
Release Date: February 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Spark New Zealand Ltd (NZTCF) reported a 67.4% increase in free cash flow to $77 million, showing improved cash management. The company declared a half-year dividend of $0.12 per share, consistent with its FY25 total dividend guidance of $0.25 per share. Spark New Zealand Ltd (NZTCF) is focusing on strategic priorities, including driving momentum in its telco core and simplifying its portfolio. The company has entered into a new strategic partnership with Microsoft to improve cloud economics and enhance customer offerings. Data center revenue increased by 13.6% to $25 million, with a commitment to expanding its 118-megawatt development pipeline. Reported revenue declined by 1.9% to $1.93 billion, driven by declines in mobile, IT services, and legacy voice. Reported EBITDA declined by 20.9% to $419 million due to lower IT services project activity and supply cost inflation. The company reduced its FY25 adjusted EBITDA guidance to $1.04 billion to $1.1 billion, reflecting ongoing economic challenges. Mobile service revenue declined by 3.7%, with significant declines in the enterprise and government sectors. Spark New Zealand Ltd (NZTCF) is facing aggressive price competition and shrinking mobile fleets, impacting its market share. Warning! GuruFocus has detected 5 Warning Sign with NZTCF. Q: The dividend remains significantly higher than free cash flow, particularly based on the latest guidance. What are the considerations for retaining the $0.25 per share dividend? A: Jolie Hodson, CEO: The decision to retain the $0.25 dividend was linked to the receipt of the Conexa proceeds expected this year. We are also considering our holistic capital management strategy, which includes reviewing the dividend policy as we move into FY26. Q: Are you still committed to reducing the leverage ratio to 1.7 times to retain an investment-grade credit rating? A: Stuart Taylor, CFO: While our net debt is at 1.8%, which is low compared to comparable telcos, we are considering future debt flexibility and other factors. The ongoing credit rating will be one of those considerations. Q: Would you consider selling the entire data center portfolio, or are you committed to retaining a stake? A: Jolie Hodson, CEO: Our intention is not to sell the entire data center portfolio. We are looking for a co-investment partnership to accelerate growth in a market with substantial opportunities. Q: Can you provide more details on the Microsoft partnership and its impact on your business? A: Jolie Hodson, CEO: The partnership involves moving more workloads to the public cloud, partnering with Microsoft for customer transitions, and using tools like Co-Pilot to improve customer experience and efficiency. This will enhance our cost base and margins. Q: How are you managing the 3G network shutdown, and what impact do you expect on Spark? A: Jolie Hodson, CEO: We are focused on helping customers with older devices transition to newer networks. We estimate around 120,000 devices and 80,000 IoT connections will be affected, and we are engaging with customers to facilitate this transition. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
