Telstra to push for cash not equity swap with NBN Co
- 29 October, 2009 11:25
- Comments 5
Telstra is unlikely to come to a pure equity swap deal with the NBN Co due to concerns over a lack uncertainty over the value of the NBN’s assets, Telstra CFO John Stanhope has said.
Speaking at Telstra’s shareholder information day, Stanhope said the NBN and new legislations’ financial impact were of paramount importance to the company and shareholders.
“Our shareholders would rightly not be happy if we vended some assets for equity where there is no certainty on the value of that equity or any certainty that there would be any value for that equity,” he said.
“But we would consider vending assets for an appropriate consideration of cash that is fair value, or even equity, if there some form of guaranteed return.”
The success of NBN negotiations, according to Stanhope, relied on:
- Fair financial consideration for value transferred to NBN Co.
- A structural separation undertaking that could not be overturned at ministerial or ACCC discretion.
- Access to advanced wireless spectrum
- Telstra keeping its stake in Foxtel and continuing to hold the HFC cable asset.
“If these conditions are met then structural separation appears to be a win-win for shareholders, the government, NBN Co and the nation” he said.
Stanhope added that claims Telstra was overestimating the costs of structural separation were false, arguing that alternatives to not separating were neither cheap nor straightforward.
Telstra CEO, David Thodey, said it was unclear whether the government had accepted that without knowing the financials of the NBN Co or having a clear valuation of the worth of the NBN Co's assets, Tesltra would need a cash deal for any equity sold to NBN Co.
"We are businessmen...I could not come to the board or shareholders on anything unless it’s very clear what returns we would get," he said. "We have made that point to the government and we will have to wait and see how that plays out."
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Comments
EUGENE TaNO
I AGREE 100 % WITH TELSTRA,S POSISTION ON A CASH FOR ANY PART OF THE ASSETS OF THE COMPANY.-
Anonymous
We just keep on paying!
And
We just keep on paying!
And we, the taxpayers and Telstra customers, just keep on paying. This runs like a never-ending twisted ballad.
First we paid to build the Telstra network.
Then we paid to use what we paid for to build.
Then we paid to buy it off ourselves (Telstra shares).
Then we paid to use what we bought off ourselves.
Now we will be paying to buy back what we paid for to build,
then bought off ourselves, and we have been paying to use all along.
I wonder what the next verse will look like?
Anonymous
The fact that 'Con' rhymes with Conroy and Conjob is no insignificant matter. These unscrupulous bast**ds are right now scheming every possibility for them to STEAL Telstra's network infrastructure and traffic away for use in their NBN without paying the poor long suffering little Mum and Dad investors of OZ one red cent...! Whether you love or hate Telstra, no Australian publicly owned, publicly listed company, deserves Conroy's absolutely totally unprecedented thug's standover treatment...!
A pox upon the scheming bast**ds....!!!
Anonymous
It is refreshing to read the coments at this site, compared to the anti- telstra site z*net, where you get a lot of ‘the end justifies the means’ deludded mentality.
Goresh
First Telecom Australia was forced to pay back the government the full value of all it's assets by way of an interest bearing loan when it was created.
Then Telstra was forced to pay a cash gratuity to the government prior to it's sale because the government didn't feel that it carried enough debt.
Then the government sold Telstra off via share floats.
Then the government regulated Telstra near to death to create a paradise for it's competitors.
Finally the government is wringing the last few drops of blood from the stone by stealing back the assets that Telecom Australia paid for in full, then Telstra's shareholders paid for in full again in addition to the new assets that Telstra shareholders paid for once the company was created via infrastructure investment paid for by reduced share dividends eg Foxtel, Bigpond etc.
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