TVNZ keeps mum on pay-TV plans

By Karyn Scherer

TVNZ has begun a major review of its capital structure, to determine how it will fund its move into digital television.

The move follows a decision by the Government to allow the State-owned broadcaster to keep just $62 million of the $162 million leftover from the sale of its investments in Sky TV, Clear Communications and the Natural History Unit.

TVNZ revealed yesterday that the Government had received another $30 million windfall from the sell-off, on top of the $70 million special dividend it agreed to hand over in June.

Chief executive Rick Ellis refused to comment on just how much TVNZ expected to spend on its digital plans, saying the information was commercially sensitive.

However, he confirmed TVNZ was taking a look at its "conservatively geared" balance sheet as part of the review.

Mr Ellis said TVNZ did not want to rush its plans for subscriber TV, but expected to be able to announce something before the end of the year. He also confirmed TVNZ would be seeking a joint venture partner for what was expected to be a nationwide service.

However, he quashed speculation the partner might include an internet service provider such as Ihug, whose deal with Sky TV is now looking shaky.

"I think it's fair to say we're now well down the track and now finalising what it is we intend to do and therefore making the appropriate announcements."

Meanwhile, TVNZ has also agreed to pay the Government another ordinary dividend of $6.2 million. The latest payout is the result of a slightly improved profit for the six months to the end of June.

Not including its one-off gains of $161.2 million, it made a pre-tax profit of $21.4 million, compared to $20.1 million from the same operations a year earlier.

Its after-tax profit was $16.1 million, up from $15.1 million for the same period a year earlier.