Telecom is unlikely to sell its Australian subsidiary AAPT in the current environment, its chief financial officer told The Australian newspaper.
The newspaper quotes Telecom's chief financial officer Marko Bogoievski as saying it was unlikely AAPT would be sold in its entirety in the increasingly turbulent telecommunications market.
He said
it was not a great time to trade in assets like AAPT.
"The industry is being re-rated downwards. You don't usually sell your house in a falling market."
Yesterday Telecom announced it would conduct a formal review of the future of AAPT. A full sale is just one of the options Telecom will look at, as well as a merger or simply hanging on to the business.
Mr Bogoievski told the paper that keeping AAPT, forming a partnership, merger, or even further acquisitions were all more likely outcomes than an outright sale.
Telecom bought AAPT six years ago for $2.2 billion.
AAPT's value was written down in Telecom's books in 2002 but is still valued at $1.4 billion.
Analysts' valuations are lower, at around $800m.
"If AAPT is not of enormous value to (Telecom), why would it be of enormous value to somebody else?" industry analyst Paul Budde said yesterday, estimating the company had a total market share of around 3 per cent.
"It's a cost-saving and a rationalisation that takes place, rather than it's an enormous added value."
Telecom shares jumped 2 per cent yesterday on news of the review, to $5.71. Market commentators said an outright sale was their preferred option, as it would free up Telecom to concentrate on its core market in New Zealand.
If Telecom does decide to go down the sale road Optus has been touted as the front-runner to buy AAPT.
The Singapore-owned telco tried to buy AAPT in 1999 but the move was opposed by the competition regulator.
The review will start in late January and take several weeks to complete.
- NZPA
