Morningstar sees New Zealand's Spark's net debt-EBITDAI ratio to fall post data centre sale

Morningstar expects New Zealand's Spark's SPK.NZ net-debt to EBITDAI ratio to fall to around 1.9 on its pro forma FY25 earnings estimates

SPK said on Tuesday it will sell 75% stake in data centre business to Aussie fund manager Pacific Equity Partners, valuing the business at up to NZ$705 mln ($419.76 mln)

Spark's remnant 25% interest ensures its shareholders can still benefit from the data centre "field of dreams" to be rolled out, adds Morningstar

Says SPK shares remain at an attractive discount to its intrinsic assessment

Notes "understandable" investor caution due to three downgrades to earnings estimates over the last 18 months

Adds market needs tangible evidence of cost-cutting with upcoming earnings to get rid of the cautious nature

Stock down 11.7% YTD

($1 = 1.6795 New Zealand dollars)