December 01, 2013
Spectrum trust struggling to pay for shares
The Maori stake in mobile phone company 2Degrees is heading backwards.
The latest accounts for Te Huarahi Tika Maori spectrum trust shows its commercial arm Hautaki borrowed $15 million from majority shareholder Trilogy International Partners to maintain its share of the third network operator.
The original shares came in recognition of the 3G spectrum the trust had the rights for as a result of treaty claims.
Director Antony Royal told the trust’s annual meeting in Palmerston North at the weekend that 2Degrees is still in growth mode, so it is not paying a dividend on the shares.
He says interest on the loan is Hautaki’s largest expense.
"In order for us to pay some of our interest we have sold some of our shares back to Trilogy. That allows us to still keep our shareholding above 10 percent but we sold shares in lieu of cash because we don’t have a lot of cash in the bank," Mr Royal says.
Hautaki is trying to sell some of its shares to iwi and other Maori organisations so it can pay off the loan, but it has so far had no takers.
Auditors BDO say Te Huarahi Tika Trust can't meet its commitments and remain a going concern unless it sells shares.
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