Telecom shares dip on US delisting news

TOM PULLAR-STRECKER
Last updated 14:28 08/06/2012

Relevant offers

Industries

Pumpkin Patch sells to Australian company Catch Group Scattergun online ads are killing brands Fletcher Construction chief Graham Darlow to retire Australian Tax Office could oppose Apple paying tax in NZ, says source Auckland Council goes to communities around working Easter Sunday Two NZ batches in global EpiPen recall Edge of Lake Te Anau included in Govt tenders for oil and gas block exploration Chart of the day: What sorts of dwellings are being built in Northland? Protesters had the better of day one at New Zealand Petroleum Conference 2017 NZ Post prices to rise due to falling mail volumes

Telecom's share price has fallen 2.4 per cent to $2.44 trading after it announced it would delist its American Depositary Receipts (ADRs) from the New York Stock Exchange and issued a trading update.

LATEST: Forsyth Barr analyst Guy Hallwright said he did not expect the delisting to have much effect on the company or investors.

The ADRs, which are akin to shares and constitute 15 per cent of Telecom's equity, will only be tradable through the over-the-counter (OTC) market from July 19.  

Hallwright said some US investment funds were subject to restrictions that meant they could only invest in overseas firms that issued ADRs, but their number and significance to Telecom was declining.

If US funds were not comfortable with the OTC market, most should be able to invest directly in NZX-listed shares, he said.

He imagined, over time, the ADRs would be withdrawn and substituted by ordinary shares.

The NYSE has a more prescriptive disclosure regime than the NZX and Telecom said the decision to delist from the exchange would save money.

Telecom at the same said it was on track to deliver earnings before interest tax, depreciation and amortisation (ebitda) of $560 million for the second half of its financial year, ending this month, and its net profit would be ''near the top end'' of its previous guidance of $160m to $190m.

Acting chief executive Chris Quin said it had seen stronger competition in the fixed-line and mobile markets which had resulted in a loss of market share, but it had managed to stay on track financially by cutting costs.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content