KEY POINTS:
Maori investors in NZ Communications - the potential provider of a third mobile network - have this week upped their stake in the company after their shareholding was diluted earlier this year.
NZ Communications chairman and a director of Hautaki Trust, Bill Osborne confirmed the company's Maori investor,
Hautaki Trust, exercised options on Tuesday to regain a share of the company diluted to 12 per cent when private equity investors took a stake earlier this year.
"In the process of negotiating the conditions in which the new investors brought their money in, Hautaki negotiated an option right to take themselves back up to 20 per cent after dilution," said Osborne.
Hautaki was at 20 per cent, rather than the 30 per cent before dilution, "but we have a hell of a lot more capital in the business now".
In March, NZ Communications - formerly Econet NZ - received a reported $100 million in conditional funding from Hong Kong-based General Enterprise Management and Communication Venture Partners of London.
NZ Communications also opened up the share option to "specific, sophisticated Maori investor groups", said Osborne. "What we wanted to do was make available our share option to experienced Maori investors, should they wish to participate as part of the Maori bloc."
Osborne would not disclose the option price or name the Maori investors, but the investors were required to put a minimum of $1 million into the company.
NZ Communications was formed in 2001 as a commercial partnership between Hautaki Trust, a pan-Maori trust holding a third-generation spectrum (3G) radio frequency given to it by the Government, and African-based mobile company Econet Wireless.
Osborne said it had taken a long time to attract investment cash because international capital markets did not perceive New Zealand as having the right business environment to build a third mobile network.
NZ Communications has been a continual agitator for change in the regulation of the mobile market, particularly co-location - cellphone operators putting their own transmission equipment into competitors' phone towers - and national roaming - critical for it starting a mobile network with nationwide coverage.
"It's been a long haul," said Osborne. "But it was in neither of the incumbents' interests to have any change take effect and they're very big and influential corporates in New Zealand."
Osborne said the company was working towards a launch in the second half of next year.
Earlier this year NZ Communications signed a supply deal with network equipment maker Huawei Technologies. It has also purchased an office building on Khyber Pass worth $4.8 million and is awaiting council building consent to install network switching equipment.
NZ Communications' shareholding is split between the Hautaki Trust (20 per cent), new investors (65), Econet Wireless (10) and minor shareholders.
Communication breakdown
* NZ Communications is 20 per cent-owned by pan-Maori group Hautaki Trust.
* Private equity players injected a reported $100 million in the telco in March.
* Further Maori investment was made in the past week.
* Company expects network operation to begin in the second half of 2008.
