New Zealand Telecom (ASX: TEL) shareholders have overwhelmingly voted in favour of demerging its infrastructure business Chorus to allow the company to participate in the country’s Ultra-fast Broadband Network (UFB) project.
The vote echoes Telstra’s shareholder vote last week which also resulted in overwhelming support for the structural separation of the company to allow it to participate in the National Broadband Network (NBN).
According to Telecom, some 99.8 per cent of votes cast were in favour of the demerger. Some 99 per cent of Telstra shareholders approved its separation.
The approval was a near-certainty for Telecom, which in August took the step of announcing the members post-separation Chorus board.
During the month Telecom also confirmed its chief executive officer, Paul Reynolds, would leave the company in 2012 following the demerger process and rebranding as New Telecom.
The New Zealand Government also approved the first major step in Telecom’s proposed demerger process, following the decision to agree to the national telco’s plan to split its assets after structural separation.
With the vote completed, Chorus will shortly stand alone as a separately listed company responsible for supplying about 70 per cent of the infrastructure required for the UFB project.
In an ASX statement, Reynolds said the shareholder approval marked the creation of an entirely new structure for the New Zealand telecommunications industry.
“We are very pleased to have received our shareholders’ consent for this significant step, and Telecom’s focus is now on swift enactment of the split, along with ensuring both companies are well positioned as New Zealand moves into the fibre future,” he said.
The demerger is expected to be finalised by 11 November when it receives a court-approved ‘scheme of arrangement.’