Austar United denies planning to sell stake

By RICHARD BRADDELL

TelstraSaturn's half-owner Austar United has dismissed speculation it may sell its stake, saying it has no plans to do so.

Describing as "wildly inaccurate" a Sydney Morning Herald article suggesting that Austar might dispose of its TelstraSaturn stake in a restructuring this month, Austar corporate affairs manager Bruce Meagher said there was no plan to do so.

Indeed, Mr Meagher said there would be no restructuring, although he conceded that some of Austar's expansion might take place at a slower rate than previously intended.

Austar, which was a star performer for some time after its float in 1999, has disappointed in recent months after the launch of its Chello broadband service fell well short of expectations, not helped by a slower post-Olympic Australian economy and the introduction of GST.

Along with Austar, TelstraSaturn has also cut its strings with Chello.

Mr Meagher intimated that the $A200 million value placed on Austar's TelstraSaturn interest by an analyst quoted in the Sydney Morning Herald was well short of the mark.

At September 2000, TelstraSaturn had $A409 million in assets and it is at present commissioning a $200 million telephone and pay television network in Christchurch.

Austar and the other half-owner, Telstra, will have to chip in $50 million each in new equity as TelstraSaturn draws down a second tranche of a $900 million debt funding facility some time in the next 12 to 18 months.

While that did not put any immediate pressure on Austar, Mr Meagher said the company had made clear that it was going to raise more capital, probably through an issue of debt.