Telecom has announced the sale of part of its Australian unit AAPT to iiNet for A$60 million ($75 million), confirming speculation it was unable to conclude its preferred deal to sell the whole company.
As well as selling AAPT's consumer division, Telecom said it had sold AAPT's 18.2 per cent stake in iiNet to institutional investors for A$70 million, A$11 million less than its carrying value as at June 30.
Combined with the proceeds from its sale of 10.1 per cent of Macquarie Telecom announced yesterday, the deals will generate about $A140 million.
Telecom had reportedly been seeking more than $400 million for AAPT as a going concern.
It will now concentrate on running AAPT's fibre network and the wholesale and business divisions, it said.
The sale of the consumer unit will reduce 2011 forecast earnings for AAPT by A$10 million, Telecom said.
"Together these transactions rationalise non-core assets, strengthen Telecom's financial position, and help reposition AAPT's operations into a focused, network-centric wholesale and corporate business that is well-positioned for future growth" said Telecom CEO, Paul Reynolds.