Vocus Communications has pulled the pin on a sale of its New Zealand business after it failed to find a suitable buyer following a seven-month sales process.
The telco said that although it received multiple offers, none of them had “appropriately reflected” the “fundamental and strategic” value of the New Zealand business, nor the certainty of funding and execution.
“Vocus NZ is an excellent business with strong leadership, an attractive growth profile, a clear competitive position and a track record of delivering solid returns on capital,” Vocus chairman Bob Mansfield said.
“The board intends to continue to invest in and grow Vocus NZ to enable that business to realise its strategic potential for shareholders.”
The telco announced its intention to sell off the New Zealand business – as well as its Australian data centres – in October last year, with the aim of getting both sold by June this year.
The proceeds of the sale were set to reduce debt and provide "strategic optionality".
Without the cash injection from the sale, Vocus has instead turned to its financiers to "provide sufficient financial flexibility for the company to complete its strategic and transformation initiatives over the next few years", according to Mansfield.
The company said its board "remains comfortable" on the positioning of Vocus' balance sheet and has no intention of pursuing an equity offering.
Vocus shareholders would be waiting anxiously for the ASX to open, following a challenging couple of years for the publicly listed telco.
The company's shares have sunk from an all-time high of $9.29 in May 2016 to trade at $2.24 at yesterday's close. The stock has since dropped to $2.12 as of 10:14 am Sydney time.
Vocus may face a class action from disgruntled shareholders centring on claims that Vocus had overstated its guidance for FY17 as it worked to integrate Amcom and Nextgen Networks and to merge with M2 Group.
In March, Vocus was removed from the ASX 100, which it had entered in 2016 after merging with consumer telco M2 Group. That year, the company's share price hit a high of $9.29 each.