2degrees boss mum on float talk

TOM PULLAR-STRECKER
Last updated 05:00 04/01/2013

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Financial analysts speculate that mobile telco 2degrees may list on the stock exchange this year.

2degrees chief executive Eric Hertz responded to the rumours by saying the company did not comment on speculation.

The mobile company adopted a new constitution just before Christmas, which can sometimes be a prelude to a public listing.

But sources said the changes, which amended the processes the company needed to follow when issuing new shares, could also be explained by a desire to ensure existing shareholders were treated fairly when they were tapped for extra capital.

2degrees has raised fresh capital from its existing shareholders, including American majority-owner Trilogy International Partners, several times to fund its growth during its start-up phase, during which it has accumulated losses of $247 million.

This year it is likely to face the additional expense of buying rights to radio spectrum at a Government auction, to pave the way fora 4G technology investment.

One analyst said 2degrees would be sure to attract interest from retail investors in a float given its strong brand, but the stock could prove hard to value because the company had yet to break even.

Co-founder Tex Edwards was issued with a million new shares in 2degrees with a nominal value of more than $1m on December 20, in an apparent settlement of a now-resolved legal dispute. That increased his stake from 0.9 per cent to 1.2 per cent.

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- BusinessDay.co.nz

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