Vodafone NZ Buys IHug

Vodafone New Zealand acquires iiNet's New Zealand ISP business iHug

October 9, 2006

1 Min Read

PERTH, Australia -- iiNet is pleased to announce the sale of 100% of the shares in its New Zealand subsidiary, ihug Ltd, to Vodafone New Zealand Ltd. The sale price of NZ$41M (AU$36 million), is approximately A$6 million in excess of book value. It is expected that completion of the sale will occur within 2 weeks.

iiNet acquired the Australian and New Zealand operations of ihug in 2003, and announced in July that following a strategic review of the Group, a desire to focus on the core Australia business, as well as unsolicited offers being received for ihug following recent changes in the New Zealand regulatory environment, a process would commence for the sale of ihug in New Zealand.

"We expected the sale process to be complete this half," said iiNet Chairman Mr Peter Harley. "We’re pleased that a fair price has been made by Vodafone, delivering a good, clean result for iiNet shareholders."

The funds realized from the sale will be applied to a reduction of bank debt and for working capital to continue the expansion of the business in Australia.

"ihug staff are expected to be retained by the purchaser and will continue to grow the business," said iiNet CEO Mr Michael Malone.

"It has been a pleasure to work with the ihug team over the past three years," said Mr Malone. "I believe that we have transformed the ihug business during that time, leaving it in a strong position for customers, staff and the new owners."

Vodafone New Zealand

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