Hautaki needs $20m to secure 2degrees holding

The Maori-owned company which has a minority interest in telco 2degrees has until the end of the month to raise $20 million or risk diluting its shareholding.

Hautaki Ltd, together with two other Maori organisations, owns 20 per cent of the new communications player.

In Hautaki's annual report chairman Brian Leighs said new capital was needed to fund the network - however, in trying economic circumstances that investment is a difficult sell this year.

"It has been a tough environment for raising equity in the global recession and it has been very difficult to get Maori organisations to consider investing outside the traditional areas of property, farming and natural resources."

That reticence was against a background of strong growth, he said in the report.

"It is early days yet, but 2degrees mobile growth has exceeded expectations with initial subscriber activations exceeding the original plans by almost three times."

The board had been working since February holding numerous hui around the country and providing detailed business information to interested parties, Mr Leighs said.

"We have until 31 October to raise these funds, otherwise our shareholding will be diluted."

Te Huarahi Tika is the charitable trust which has 100 per cent shareholding in Hautaki.

Speaking after the trust's annual general meeting yesterday, Mr Leigh would not say how much of the $20 million had been raised, but said the investment had only been pitched at Maori organisations with $500,000 to spend.

After working for nearly a decade to ensure a third player in the telecommunications market, a reduction wasn't something Hautaki wanted, Mr Leigh said.

Other investors in 2degrees include Trilogy International which has a 52 per cent stake, Communication Venture Partners, a UK-based private equity firm, which has a 25 per cent interest with associated interests controlling the remaining shares.

Te Huarahi Tika Trust, representing pan-Maori interests, was established in 2000 when government was auctioning off 3G spectrum.

The spectrum was set aside for Hautaki to purchase at a discounted price to allow Maori a foothold into the industry. Trust chairwoman Mavis Mullins said Maori had to start thinking about communications investments as the "new real estate".