The Australian government will decide by the end of May whether to sell its 51.8% stake in national incumbent Telstra, Finance Minister Nick Minchin told The Australian newspaper. The paper reported that Minchin was in favour of offloading the government’s shares via a single sale. The state hopes to raise around AUD24 billion (USD17 billion), though the company’s value has fallen in recent months following a protracted argument with regulators over access to its network. Telstra’s share price has dropped around 26% to AUD3.74 since July 2005, well below the government’s book value of AUD4.13.
Telstra was wholly state-owned until 1997 when a third of its shares were sold for AUD14.3 billion; another 16.6% tranche followed in October 1999 and the government first announced plans to sell its remaining 51.8% stake once its regional and rural services were deemed adequate. Although this condition was met in 2002, the privatisation process was delayed until 2005 due to weak market conditions and political opposition from the Labour Party. In August that year the state invited international banks to underwrite the AUD32 billion (USD24 billion) sale and the Telstra (Transition to Full Private Ownership) Act 2005 was eventually passed on 15 September paving the way for a final stake sale.