Telstra stumps up $600m for NZ debt

TelstraClear has secured from its parent Telstra the $600 million it needs to repay debt and shore up its business.

The country's second-ranked telco responded swiftly yesterday to a Business Herald article pointing out the shaky state of the company's finances and a looming deadline of September 12, by which time hundreds of millions of dollars of debt had to be repaid to a syndicate of banks.

Debt totalling $510 million originally had to be repaid by June 12, but TelstraClear won a three-month extension to seek refinancing. The total amount due is now $600 million.

Telstra yesterday afternoon issued a statement to the Australian Stock Exchange saying it was coming to the rescue with a five-year refinancing package approved by the TelstraClear board last week. But on Friday the company's chief executive, Rosemary Howard, could not confirm that the refinancing had been secured.

Telstra has a 62 per cent stake in TelstraClear.

TelstraClear spokesman Mathew Bolland said the company had not been in a position to reveal Telstra's refinancing package last week and elements of the refinancing had to be confirmed over the weekend.

"We had a deal our board had been involved in that we couldn't announce."

In the ASX statement, Howard said refinancing through Telstra would save TelstraClear "millions of dollars in upfront bank fees".

Bolland would not say where Telstra was getting the money from.