Tel­stra axes A$5.5b fundrais­ing plan

The Sun (Malaysia) - - SUNBIZ -

SYD­NEY: Tel­stra Corp, Aus­tralia’s largest tele­coms oper­a­tor, dropped a plan to raise as much as A$5.5 bil­lion (RM18.8 bil­lion) through an in­come se­cu­ri­ti­sa­tion deal af­ter a gov­ern­ment-backed busi­ness part­ner re­jected the move, send­ing its shares tum­bling.

Tel­stra said two weeks ago it was con­sid­er­ing do­ing a deal with in­vestors by which it will get up­front a chunk of the A$1 bil­lion per year that it re­ceives from state-owned Na­tional Broad­band Net­work (NBN), which rents ducts and other in­fra­struc­ture from Tel­stra.

But yes­ter­day Tel­stra said in a state­ment it was scrap­ping the plan as the gov­ern­ment net­work re­fused con­sent.

“Without that, we can’t pro­ceed,” Tel­stra spokesman Jon Court told Reuters, adding though, that it will con­tinue to re­ceive the in­come from the state net­work.

The scrap­ping of the fundrais­ing plan comes at a del­i­cate time for Tel­stra, which built Aus­tralia’s cop­per-wire phone net­work and is now seek­ing up­front cash to spend on growth busi­nesses as its tra­di­tional rev­enue streams de­cline.

It was not im­me­di­ately clear why the gov­ern­ment net­work would need to ap­prove Tel­stra’s se­cu­ri­ti­sa­tion plan, de­tails of which are not known.

The state net­work, though, is usurp­ing Tel­stra’s sta­tus as Aus­tralia’s mo­nop­oly tele­coms whole­saler, and will re­place Tel­stra’s cop­per lines with fi­bre-op­tic by about 2020.

Tel­stra warned ear­lier this month the net­work would hit its earn­ings by about A$3 bil­lion a year from its sched­uled com­ple­tion in 2021. It said it would cut its div­i­dend by 30% in fis­cal 2018, partly be­cause of the neg­a­tive im­pact of the state net­work.

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