- Telstra (TLS), with a major helping hand from the Australian government, completes its US$1.6 billion (A$2.4 billion) purchase of telecommunications giant Digicel Pacific
- Telstra contributed just US$270 million of equity to the deal, with the federal government providing the remaining $1.33 billion of funds
- Telstra now owns 100 per cent of Digicel Pacific and CEO Andrew Penn says Digicel will be operated by Telstra International as a stand-alone business
- Analysts suggest the government support for the deal came as part of a move to stop China from snapping up the Digicel assets and using them to spy on Australia and its neighbours
- Shares in Telstra last traded at $3.90 on July 13
Telstra (TLS) has, with a major helping hand from the Australian government, completed its US$1.6 billion (A$2.4 billion) purchase of telecommunications giant Digicel Pacific.
Telstra contributed just US$270 million of equity to the deal, with the Australian government shelling out the remaining US$1.33 billion through cheap non-resource loans and “equity-like securities”.
Despite its comparatively slim contribution to the buyout, Telstra now owns 100 per cent of Digicel Pacific.
Analysts suggested the government provided the majority of the funds for the deal as part of a move to stop China from purchasing the Digicel Pacific assets over fears Beijing could use them to spy on Australia and its neighbours.
Telstra CEO Andrew Penn said the Pacific telco would be operated by Telstra International as a stand-alone business.
“We are very pleased the deal has completed and we welcome Digicel Pacific to the Telstra family,” Mr Penn said.
“We have been working closely with Pacific Governments on this acquisition and we’d like to thank them for their cooperation and support. We look forward to continuing to work with them as we operate Digicel Pacific and strengthen our relationships in the region.”
Digicel Pacific provides communication services to Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu. According to Telstra, Digicel had around 2.8 million subscribers and 1700 employees generating US$466 million in service revenue for the 12 months to the end of March 2022.
Meanwhile, Telstra said a tax dispute with Papua New Guinea had been sorted out, with the vendor having made arrangements to “resolve the matter with the PNG tax authorities”.
Shares in Telstra last traded at $3.90 on July 13.