BNZ is extending a $165 million credit line to mobile phone service provider 2degrees.
Based on its most recent annual financial results, 2degrees had recorded accumulated losses of $247.4 million up to the end of 2011. However, BNZ head of institutional banking Paul Blair said the firm had been cash flow positive for almost a year and was able to fund its own operations without shareholder funding.
"Bank finance will accelerate the business,” Blair said.
2degrees chairman and acting chief executive Stewart Sherriff said the company has a fully funded business plan, providing for continued national network expansion and revenue growth. It was now transiting from vendor finance to bank credit. 2degrees CEO Eric Hertz died in a plane crash earlier this year.
“We’re thrilled to have BNZ join us as a partner in the future of 2degrees. 2degrees has grown rapidly and has a loyal customer base. We have laid the foundation for a sustainable, profitable business and now have the funding to invest in further network expansion across New Zealand,” Sherriff said.
In addition to funding future investment needs including fourth generation mobile phone technology deployment, the BNZ loan will enable 2degrees to repay vendor finance from Huawei.
2degrees says it has more than one million customers, has positive earnings before interest, tax, depreciation and amortisation, employs 760 staff and operates about 40 retail stores.
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