Stuart Corner
Wednesday, 31 January 2007 03:19
IT Industry -
Deals
Page 2 of 2
Marko Bogoievski, Telecom CFO, claimed that the deal would "provide
significant benefits to Telecom by enabling AAPT to leverage its
investment in service capability and it gives us the scope over time to
bring more of our customers onto the combined access network rather
than servicing them through wholesale arrangements."
Telecom anticipates that the acquisition of
PowerTel will provide significant value to Telecom shareholders, with
the acquisition expected to be EPS-positive within 12 to 18 months. The
acquisition will be funded by a combination of cash and Telecom's
existing debt facilities.
However Telecom shareholders have already suffered significant losses
from the company's attempts to crack the Australian market. The value
of AAPT has been written down by hundreds of millions of dollars since
it was bought, and was at one time up for sale itself.
It is expected that the scheme documents will be sent to PowerTel
shareholders by late March and that PowerTel shareholders will be asked
to vote on the scheme in late April. Telecom has been advised by
Citigroup.