NZD7m Woosh deal splutters to a halt

7 Nov 2011

According to Stuff.co.nz, the proposed USD5.5 million acquisition of New Zealand broadband provider Woosh Wireless by Canadian company Craig Wireless may have hit the skids, after the government declined to allow the two companies to pool their pre-existing spectrum resources. Under the terms of the deal, agreed in September, Craig subsidiary Craig Wireless South (CW South) intended to assume major Woosh investor Kuwait Finance House’s loan for some USD5 million, whilst Rod Inglis, the current chairman of Woosh, would participate in the acquisition by contributing USD500,000 of the total purchase price. Upon completion of the transaction, CW South would have held 51% of Woosh, whilst Inglis and his affiliates would retain the remaining 49% of the company’s equity.

However, the deal was conditional on Woosh being permitted to transfer 30MHz of radio spectrum in the 2.3GHz-2.5GHz band to Craig, which already owns 40MHz in the same band. Under existing rules, no company can own more than 40MHz in the 2.3GHz-2.5GHz band. Although the spectrum cap is expected to be lifted in December 2012, the Ministry of Economic Development (MED) proved reluctant to heed Woosh’s protests to remove the cap early. The MED’s radio spectrum manager, Len Starling, reportedly advised communications minister Steven Joyce against doing so as he did not see ‘a clear overall benefit’.

New Zealand, Craig Wireless (NZ), Craig Wireless Canada, Woosh Wireless