Perth-based ISP iiNet has put is its New Zealand business subsidiary iHug on the market, the company's executive chairman Peter Harley has announced. iiNet is aiming to fund further expansion of its Australian broadband network by selling its New Zealand ihug.
In a statement released to the market today, iiNet said that it wanted to focus on developing its Australian business.
The company is looking for a cash sale to fund further infrastructure investment in the Australian market, Mr Harley said. Part of the proceeds would be used to reduce the company's debt to Westpac.
iiNet bought ihug's Australia and New Zealand businesses in September 2003 for $30.1 million in cash and 23.7 million iiNet shares.
ihug has 120,000 subscribers in New Zealand but this does not accurately represent its customers base because some customers receive a combination of dial-up internet, broadband and fixed-line phone services.
iiNet's New Zealand operation currently has around 120,000 internet subscribers and recorded and EBITDA profit of $5.7 million last financial year.