Minister raises doubts on Telstra sale

CANBERRA - The Australian Government may shift its entire Telstra stake into an investment fund rather than selling it, Finance Minister Nick Minchin said, as shares in Australia's biggest telephone company hit a record low.

"If we don't sell all our shares, we could either sell some and put the rest into the Future Fund or put the lot there," Minchin told the West Australian newspaper.

Telstra's share price has fallen 12 per cent over the past two months as it increased warnings about the impact of Government regulations. Chief financial officer John Stanhope this week told the Australian Financial Review that regulations could destroy investor interest in the share sale.

Shares in Telstra fell 5c to a record-low A$3.62 yesterday, closing a tad better at A$3.63. In December, the Government slashed the expected return from the sale of its 51.8 per cent stake to A$26.4 billion, or A$4.13 a share, from A$33.8 billion, or A$5.25 a share.

- BLOOMBERG