The Australian telecommunications company Telstra to buy South Pacific telco operator Digicel for $1.9 billion from Denis O’Brien, Irish billionaire.
The company Telstra will own around 100 per cent of the new entity as part of the $US1.6 billion ($2.1 billion) deal, which will be completed within six months. The sale follows almost a year of discussions between the telco giant and the federal government about the asset.
Jonathan Pryke from Lowy Institute, a Sydney-based think tank. said:
“Digicel is the primary player in the Pacific and Australia sees it as a strategic asset that they can’t allow to fall into the hands of China.”
It is said that Telstra would be spending somewhere between $200 million and $300 million of its money and the Australian government would provide an equity investment of the remaining $1.5 billion at an interest rate of 3 per cent.
Barrenjoey is advising Telstra and Macquarie has advised the government, while former treasurer Joe Hockey’s firm Bondi Partners is working with Digicel.
The specific reasons behind the joint offer have not been publicly confirmed, but senior government and telco industry sources have indicated it is to do with potential interest in the assets from Chinese telecommunications companies.
There is no public confirmation behind the joint offer but the telco industry sources and the senior government have indicated it is to do with potential interest in the assets from Chinese telecommunications companies.
The chief executive of Telstra, Andy Penn said:
Digicel was a commercially attractive asset the move was an “important milestone in the company’s relationship with the Australian government.”
