Telecom finally got
to release some good news to the market yesterday with the
$A140 million ($NZ175 million) sale of assets in Australia.
Telecom is selling the consumer division of AAPT to internet
service provider iiNet for $A60 million and it is selling an
18.2% stake in iiNet for $A70 million.
On Thursday, it said it was selling its 10.1% stake in
Macquarie Telecom for $A9.9 million.
The deals were leaked to Australian media. Telecom shares
resumed trading after the announcement yesterday.
Forsyth Barr broker Suzanne Kinnaird said the consumer
division was viewed as the most difficult part of AAPT to
sell and the sale was a positive outcome for Telecom.
The price achieved was slightly above Forsyth Barr estimates.
"While the remainder of AAPT - physical assets and wholesale
customer base - is useful for servicing of transtasman
clients, it's not essential. We believe Telecom is likely to
still be interested in selling the rest at the right price."
The announcement was a small positive, but not a negative for
Telecom, in terms of Forsyth Barr's valuation or
recommendation, Ms Kinnaird said.
Investors had been hoping the company would sell all of its
AAPT business in a $A300 million plus deal.
"It has been a disaster of investment for Telecom and a lot
of shareholder wealth has been destroyed," Grant Williamson,
director of Hamilton, Hindin, Greene, said yesterday.
Telecom said AAPT would now focus all its efforts on
leveraging its network infrastructure to deliver superior
voice, data and internet solutions to the wholesale and
business market.
The sale of its consumer division would have a negative
impact on AAPT's 2011 earnings before interest, tax,
depreciation and amortisation of about $A10 million.
Telecom chief executive Paul Reynolds said the transactions
rationalised the company's non-core assets and repositioned
AAPT's business to a network-centric wholesale and corporate
business that was well positioned for growth.
Australian media was speculating Telecom could sell the
remaining AAPT business into the country's national broadband
network at a later date.
AAPT is estimated to have cost Telecom NZ shareholders more
than $2 billion.
Telecom shares rose 1c to $2 when they resumed trading.
Bookmark/Search this post with:
A name, residential address, and (preferably residential) telephone number is required from readers who comment on ODT Online. These details will not be visible to site visitors.