26 Sep 2012
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Craig Wireless increases Woosh holding

By Pattrick Smellie

US telecommunications company Craig Wireless Systems has lifted its stake in local internet service provider Woosh Wireless to 75 percent.

The California-based company increased its interest in Woosh from 51 percent after acquiring additional equity held as treasury stock, Craig Wireless said in a statement.

The US firm bought Woosh for US$5.5 million last year in a deal to satisfy $20.6 million of debt owed to then-investor Kuwait Finance House.

"We are pleased to have increased our equity stake in Woosh Wireless Holdings Limited as we continue to support and develop our business presence in New Zealand," Craig Wireless chief executive T. Boyd Craig said.

Woosh has made up the bulk of Craig Wireless' sales since its takeover, with New Zealand revenue of C$7.7 million in the nine months ended May 31 out of total sales of C$7.8 million.

Craig Wireless posted a net loss of C$9.4 million, or 17 Canadian cents per share, in the nine month period, compared to a loss of C$7.7 million, or 15 cents per share, a year earlier.

Woosh's latest financial statements show a loss of $2.9 million in the year ended June 30, 2011, which the company blamed on one-off items including the impairment it wore on the sale to Craig, a $2.6 million insurance bill for earthquake damage to its Christchurch network and a $1.8 million foreign exchange gain.

Woosh made an operating loss of $477,000 in the latest year on sales of $18.3 million which it attributed to rising network direct costs. Those statements were prepared on the basis that the business would cease trading, with its assets transferred to a new entity.

Since its incorporation in 1999, Woosh has accumulated losses of some $182.1 million with negative equity of $14 million.

Shares in Craig Wireless, which trade on the Toronto stock exchange, were unchanged at 10 Canadian cents, having shed 40 percent this year. That values the firm at C$4.77 million.

By Paul McBeth - BusinessDesk

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