Telecom sets dates for shareholder vote, demerger

Telecom has announced it will hold a shareholder vote to confirm its demerger from network arm, Chorus, at its annual meeting on October 26.

If the vote passes, Telecom expects to separate from Chorus by November 30.

CEO Paul Reynolds, who announced last month he will leave the company following completion of the demerger, says the separation will maximise long-term value for Telecom shareholders.

"It allows Chorus to take a leading role in the government-led fibre initiative, aligns the interests of Chorus with the government’s UFB objectives, and avoids Telecom competing with government-backed fibre competition if Telecom is not a partner in the UFB initative,” Reynolds says.

"Not only this, but the demerger presents the opportunity for New Zealand to move to the very forefront of global telecommunications.”

Telecom has also detailed the board of directors re-shuffle that will be enacted if the merger goes ahead.

Mark Verbiest, who served as Telecom general counsel from 2000 to 2008, will take over from chairman Wayne Boyd effective from the date of the demerger. Boyd will step down from the board along with Ron Spithill, while Murray Horn and Kevin Roberts will stand for re-election.

In addition, Sue Sheldon will step down from the board to take up her role as chairman of Chorus.

As replacements to the departees, the board has proposed NZ Post deputy chair Justine Smyth, Transpower director Maury Leyland, investment banker Charles Sitch, and CTO of Hong Kong telco PCCW, Paul Berriman.

Boyd says he believes the new board will be strong, diverse and highly skilled.

"It provides the right balance of governance, strategy, understanding of technology and an exceptional depth and breadth of experience both in New Zealand and overseas,” Boyd says.