TeamTalk announced that it has signed its new banking facility with Westpac New Zealand.
The new facility for the company runs through and until March 31, 2020 to replace the existing facility which expires at the end of August 2017.
In line with the company’s strategy, the recently completed Farmside transaction with Vodafone has enabled the company to pay down debt and enable TeamTalk to reduce its financing requirements.
The new facility will be for $27 million on broadly the same terms and conditions including an agreed repayment schedule, that will allow sufficient headroom and flexibility to execute its capital plan.
Andrew Miller, TeamTalk chief executive says, “We announced in February that we had agreed the essential terms of our new facility but the Farmside transaction has enabled us to reduce our requirements and make savings in both fees and financing costs.
“We have been very clear about our strategy to reduce debt and have therefore put in place a plan to further reduce our facility in steps and thus make further savings in our finance costs.”
The new facility provides further evidence of the company delivering on its business plan.
Earlier this month, TeamTalk announced the completion of the transaction enabling Vodafone NZ to acquire 70% of the shares in BayCity Communications (which, together with its subsidiaries is referred to as the Farmside Group) for $10 million in cash.
TeamTalk is able to sell its remaining 30% to Vodafone NZ for $3 million at any time over the next three years by way of a put option – Vodafone NZ will also hold a call option to enable them to acquire the remaining 30% of the shares in Farmside for the same price in certain circumstances.
Despite the acquisition, the companies assert it will be business as usual with TeamTalk continuing to manage Farmside under a management contract, while the transaction will build on the relationship between the two and open the door for synergies beyond Farmside.
Spark New Zealand had earlier attempted to acquire TeamTalk for 100% of its ordinary shares at 80 cents per share.