Spark partners with Challenger for new mobile financing structure

Spark New Zealand (Spark) announced a partnership with ASX-listed financial services organisation Challenger Limited to establish a new financing structure for its interest-free payment (IFP) plans. This initiative aims to reduce working capital on Spark's balance sheet and support the continued growth of IFP as a key tool for customer acquisition and retention in its mobile business.

Spark will sell eligible receivables from its existing IFP customers to Challenger for ~$240 million, with proceeds used to reduce net debt. This transaction is not expected to materially affect Spark's net debt to EBITDAI ratio. The partnership also includes an ongoing arrangement to sell future IFP receivables to Challenger regularly.

This collaboration is set to enable Spark to continue expanding its mobile business while improving capital efficiency and return on invested capital. Spark will retain full control over the customer experience, including credit checks and collections.