Telecom NZ to hang on to AAPT after suitable suitor fails to emerge

5 May 2006

Telecom New Zealand will retain its Australian operations, including fixed line operator AAPT, after it failed to find a suitable buyer or partner for the ailing business. ‘We did end up receiving three proposals – one outright sale proposal and two business combination ideas,’ Telecom NZ’s chief financial officer Marko Bogoievski told analysts. ‘And for a number of reasons we did not think they met the right combination of value and/or business alliance.’ He added that Telecom NZ was still open to offers for AAPT.

Telecom NZ bought AAPT in 1999 for about AUD2.3 billion (USD1.77 billion), but in February its parent drastically reduced its book value to AUD628 million, following a review of the company’s recent performance and assessment of its future prospects. In October 2005 it was reported that AAPT’s fixed line rival SingTel Optus was preparing for a second attempt to take over the telco and Telecom NZ confirmed it has been approached by a number of parties about a sale of – or an alliance with – AAPT, with Optus the frontrunner. Vodafone, Primus, Commander Communications, SP Telecom and Macquarie Bank had also been named as potential buyers.

AAPT this week reported a 47.7% decrease in EBITDA for the nine months to 31 March 2006, down to AUD58 million. Revenues were AUD421 million, down 8.1% year-on-year, due to a fall in mobile earnings and the impact of special offers.

Australia, AAPT, Spark New Zealand Group