Cable & Wireless buys into Aussie telecoms
Your support helps us to tell the story
As your White House correspondent, I ask the tough questions and seek the answers that matter.
Your support enables me to be in the room, pressing for transparency and accountability. Without your contributions, we wouldn't have the resources to challenge those in power.
Your donation makes it possible for us to keep doing this important work, keeping you informed every step of the way to the November election
Andrew Feinberg
White House Correspondent
CABLE & WIRELESS is spending pounds 500m on a controlling stake in Optus when the Australian telecom group floats on the Australian Stock Exchange later this year.
Optus yesterday announced details of the long-awaited flotation that will value it at A$6.65bn (pounds 2.33bn), making it one of the country's 15 largest listed companies by market capitalisation.
Optus, which is Australia's second-largest telecom operator behind Telstra, has a broad range of fast-growing telecoms interests spanning mobile, satellite, long-distance and local networks. It is expected to move into profit for the first time in the year to next June. Last year, it reported a net loss of A$41m on revenues of A$2.99bn.
C&W will inject A$1.45bn into the company by subscribing for 472.6m shares and exercising 332.9m options. The move, which takes C&W's total investment in Optus to A$3bn, will lift its shareholding to 52.8 per cent from its current level of 49 per cent.
A further A$1bn will be raised from stock market investors. The cash will be used to pay off debt and develop the business.
Following the flotation, which will be completed in November, C&W chief executive Dick Brown will become chairman of Optus.
Mr Brown said: "The group's decision to subscribe for additional shares and exercise its options is a clear indication of its confidence in Cable & Wireless Optus as a strong and growing investment."
He added that the operator is one of C&W's three core global businesses. The group also has controlling stakes in Hong Kong Telecom and Cable & Wireless Communications, the British cable operator.
As part of the flotation Mayne Nickless, the healthcare and transport group, will sell its entire 25 per cent shareholding in Optus.
The flotation is taking off at a time when a brace of other global telecom companies are pressing ahead with plans to raise cash despite volatile global markets.
DoCoMo, the Japanese mobile operator, is in the midst of a pounds 36bn flotation which is the world's largest ever equity offering. Swisscom and Irish state operator Telecom Eirann are also planning flotations.
Meanwhile, C&W's US subsidiary yesterday unveiled plans to offer its internet customers long-distance phone calls at 5 cents a minute on weekends and 7 cents a minute on week days - the lowest prices in the industry. The move follows C&W's acquisition of MCI's internet backbone and customer base for $1.75bn earlier this year.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments