Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Plenty of pomp as Chorus and Telecom part

Guitarists serenade the separation as confetti rains down in the Telecom building yesterday. The companies have been operating at arm's length since 2008. Photo / Sarah Ivey
Guitarists serenade the separation as confetti rains down in the Telecom building yesterday. The companies have been operating at arm's length since 2008. Photo / Sarah Ivey

Telecom pulled out all the stops to celebrate its break-up with an extravagant show yesterday that included conch-shell calls, a Pacific Island choir and a shower of blue confetti.

Despite the split with Chorus being announced in May the ceremony in Auckland attended by several hundred employees was full of pomp.

The executive teams from both companies swapped gifts on stage. Telecom gave a conch and pounamu while Chorus gave a tree-branch plaque and a set of personalised high-visibility vests.

Chorus chief executive Mark Ratcliffe said the plaque symbolised a tree in Hawkes Bay "situated between two telephone poles" which grew around a telephone cable.

Telecom boss Paul Reynolds said the event marked "one of most significant days in Telecom's history".

The company was now "free and able to compete without the one arm tied behind our back" after years of "undue" Government regulation, he said.

Following operational separation in 2008, Reynolds said, Chorus had already been operating at arm's length from Telecom.

"Maybe Mark [Ratcliffe] had sometimes felt like he was in the granny flat out the back but today Chorus are very definitely moving to their new place," Reynolds said.

Opening with drums and song - which Reynolds joked was a "great New Zealand chorus" - the ceremony closed with confetti, streamers and performers in orange high-visibility vests leaving Telecom's building carrying office-document boxes.

Since May, Telecom and Chorus have been busily preparing to split up and completed the process yesterday.

The demerger sees Chorus become a public company to take part in the Government's ultra-fast broadband scheme and roll out high-speed fibre internet cables in 24 towns and cities over the next eight years.

Since the split, Chorus is now a wholesaler and own 130,000km of copper lines, more than 27,000km of fibre cables and more than 500 telephone exchanges.

Telecom is a standalone retail business but keeps hold of its mobile network.

In the lead-up to the demerger, Chorus and Telecom listed separately on both the NZX and the ASX last week.

At the close of the first day of trading on the local market, Chorus closed at $3.21 and Telecom at $2.025.

Chorus reached a high of $3.31 over the past week and closed yesterday at $3.29, down 2c.

Telecom dropped to a low of $1.935 since the separate listings, and closed yesterday at $2.03 up 2.01 per cent.

Using analyst calculations, the combined value of both companies is more than Telecom before the split listings.

The split is one of the country's biggest corporate shakeups and was voted through with a resounding majority by Telecom shareholders on October 26.

Staff cheered as the confetti rained down yesterday.

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a3 at 24 Jul 2014 05:47:34 Processing Time: 259ms