Technology news and Jobs 
Telecommunications Telstra ventures into China with $US254m investment
Telecommunications Telstra ventures into China with $US254m investment | Telstra ventures into China with $US254m investment |
|
| by Stuart Corner | |
| Thursday, 31 August 2006 | |
      
Telstra will pay $US254 million to acquire the stake. SouFun founder an CEO, Vincent Mo will remain a significant shareholder and continue in the role. The balance of the shares will be held by management and IDG, a venture capital firm. Telstra has moved to minimise the cash outlay for the deal, and allay investor concerns, by simultaneously announcing the sale of a 'non-core' asset: Australian Administration Services (AAS), the superannuation administration business of its subsidiary KAZ Group. This has been sold to Link Market Services for $A215 million. Telstra will take $35.5 million from the proceeds of the AAS sale leaving it with a net outlay of $A91.5 million for SouFun. The transaction also includes 100 per cent of Atune Financial Solutions Pty Ltd and the remaining 50 per cent equity in Money Solutions Pty Ltd. Telstra stressed that "KAZ continues to be a crucial part of Telstra's ICT strategy and service delivery...KAZ will continue to offer business process outsourcing services which are IT and communications intensive – such as document management and contact centre services – and aligned to the core capabilities of KAZ and Telstra." It will also continue to provide IT services to AAS. Telstra stressed the growth prospects for SouFun and the synergies with its existing Sensis online businesses. "SouFun is cash flow positive from day one and is expected to contribute net revenue and EBITDA of $A$52m, and$A18m respectively in FY2007." Sensis CEO, Bruce Akhurst, said. Telstra claims that the online real estate market in China is growing at 66 percent CAGR, real estate sales by value at 21 percent and online adverting general at 44 percent. SouFun is currently among the top 100 most visited websites worldwide, and promotes new properties in 40 cities. Sensis intends to expand this to 100 by December 2008 and to "leverage SouFun's highly desirable user base to provide offerings into adjacent businesses e.g. home related offerings." Telstra also views SouFun as a stepping stone into the wider China market, saying: "The investment will yield relationships and experience in China from which further opportunities will emerge." |
Tags
| < Next story in category | Previous story in the category > |
|---|
