• Spark partners with Challenger to establish new financing structure for interest free payment (IFP) plans
• Sale of existing IFP receivables to reduce net debt by ~$240 million in H1 26
• Ongoing arrangement to sell future IFP receivables to Challenger, supporting growth in IFP

Spark New Zealand (Spark) has partnered with ASX-listed financial services organisation Challenger Limited (Challenger) to establish a new financing structure for the interest free payment (IFP) plans Spark offers its customers to acquire mobile handsets and other accessories. The new structure will reduce working capital carried on Spark's balance sheet and support the continued growth of IFP as a key acquisition and retention tool in Spark's mobile business. Spark will sell eligible receivables from its existing IFP customers to Challenger for ~$240 million. The proceeds will be used to reduce net debt, but will not materially affect Spark's net debt to EBITDAI ratio. In addition to the sale of Spark's existing IFP receivables, the partnership includes an ongoing arrangement with Challenger to sell future IFP receivables on a regular basis. This will enable Spark to optimise its working capital and increase the overall size of IFP funding offered to its mobile customers. Spark will continue to retain full control of the overall customer experience, and the new financing structure will not affect how Spark customers enter into IFP plans or make their IFP payments, nor will it change how Spark manages credit checks, collections, or the sourcing and supply of devices.

The partnership with Challenger enables Spark to continue expanding its mobile business while improving capital efficiency and return on invested capital.