University of Canterbury reassures bondholders

Thursday 24th March 2011

The University of Canterbury in Christchurch has told holders of its bonds that payments to them will not change because of the city's February earthquake.

The university provided an update on how the earthquake affected it to the NZX's debt market where its bonds trade.

It said it had extensive insurance cover but was likely to have to meet the first $10 million of costs under a new policy entered into by all New Zealand Universities from December 1, 2010.

It would also invest up to $20 million in prefabricated structures it expected to occupy for three to five years while buildings were repaired. The cost would be funded from university resources, insurance payments and the residual value of the prefabricated structures.

The university has 80 separate structures on its 87ha campus, which is in the northwest of the city. It said 13 out of 186 structural spaces needed further investigation before planning remedial work, while 120 could be re-occupied.

"In the context of an entity with over $700 million of net equity as at December 31, 2010, and $300 million per annum in total revenues and the committed support of the Government, the university is confident that the impact, while material, poses no threat to the long-term viability of the institution," the statement said.

The university re-started 200 courses on March 14 and 700 on March 21. About 600 students have opted for semester exchanges to other universities and 400 domestic students have withdrawn.

NZPA

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