Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Telecom sells AAPT for A$450M to TPG Telecom

Telecom sells AAPT for A$450M to TPG Telecom

By Paul McBeth

Dec. 9 (BusinessDesk) - Telecom Corp, the country’s biggest telecommunications company, sold its Australian AAPT unit for A$450 million to ASX-listed internet service provider, TPG Telecom, beating initial expectations of what the unit would go for.

The Goldman Sachs-managed sale is expected to be completed on Feb. 28, and was at a multiple of about 6.4 times AAPT’s recurring annualised earnings before interest, tax, depreciation and amortisation of $70 million, Telecom said in a statement. When Telecom announced the unit was up for sale in October, Australian media reported AAPT could fetch as much as A$403.5 million.

The proceeds will be used to repay debt in the first instance, and Telecom will provide more guidance on where the remainder will go at its first-half profit announcement next February.

Under the new leadership of chief executive Simon Moutter, Telecom has been refocusing its strategy to targeting mobile and data revenue and backing away from being a simple infrastructure player.

“The sale of AAPT is consistent with this strategy and with our desire to focus principally on our New Zealand operations and on the needs of New Zealand customers,” Moutter said. “AAPT is performing well. David Yuile and his management team have done an impressive job during the last three years to simplify, stabilise and reshape the company.”

Telecom sold its AAPT consumer division to ASX-listed iiNet for A$60 million, leaving the New Zealand company with wholesale customers for its network infrastructure. The Australian unit has been a perennial underperformer for the company since it spent A$2.3 billion to acquire AAPT at the height of the dot-com boom in 1999 and 2000.

The AAPT unit reported a 16 percent drop in earnings to $74 million in the year ended June 30 on a 22 percent slump in sales to $515 million, with the decline heightened by a stronger kiwi dollar. The unit lost customers amid market consolidation in the Australian Federal government’s National Broadband Network roll-out.

Shares in Telecom fell 0.7 percent to $2.285, and have edged up 0.4 percent this year. The stock is rated an average ‘hold’ based on nine analyst recommendations compiled by Reuters, with a median target price of $2.40.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news