1492987411780 - 2degrees owner seeks to cut interest bill

2degrees owner seeks to cut interest bill

2degrees’ majority-owner is seeking to cut the interest bill on hundreds of millions of dollars of debt it used to finance the mobile phone company.

Trilogy International Partners, which listed on the Toronto Stock Exchange last year, is currently paying a hefty 13.37 per cent interest rate on bonds, to compensate investors for the high risks involved in its business.

However, a plan by Trilogy would see those bonds paid off ahead of their 2019 due-date, and its business refinanced by the issue of US$350 million (NZ$500m) of new debt, which would pay interest at the more modest rate of 8.87 per cent.

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Tri logy said the new notes would expire in 2022 and would be secured by its stake in 2degrees and the loans it had made to the Kiwi company.

Trilogy, which also owns a majority stake in Bolivian mobile operator NuevaTel, is due to report its first-quarter results on May 11.

The results announcement is likely to provide the first indication of whether 2degrees’ business has been materially impacted by technical glitches with its top-up and customer service systems that followed the introduction of new software in January.

Results posted by Trilogy in March indicated 2degrees had at least come close to breaking even in 2016 and may have posted its first annual profit.