Telecom at 4-year low

Speculation that Telecom will need to make a rights issue to pay for its mop-up of Australian subsidiary AAPT drove its shares close to a four-year low yesterday.

Telecom shares closed locally at 672c, down 8c for the day, continuing the slide since its results and a change in dividend policy were detailed last week.

Buying out the 19 per cent stake in telecommunications company AAPT is expected to cost Telecom about $572 million.

Australian brokers were speculating yesterday that Telecom would seek those funds through a rights issue.

That was enough to push it further down the slope it has been on since it said last week that future dividends would be limited to 50 per cent of its net profit instead of the 98 per cent paid in the last year.