Digicel Pacific a ‘very attractive’ asset , says Telstra chief

Talks on company potentially acquiring Denis O’Brien-owned business continue

A Digicel store in Fiji. Telstra’s AU$2 billion bid for Digicel Pacific would be backed with a loan from the Australian government. File photograph: Getty

A Digicel store in Fiji. Telstra’s AU$2 billion bid for Digicel Pacific would be backed with a loan from the Australian government. File photograph: Getty

 

Telstra chief executive Andy Penn has described Digicel Pacific as an attractive asset and said talks on potentially acquiring the Denis O’Brien-owned telecoms business were continuing, according to reports in the Australian media.

“Digicel is a very attractive and successful business in the Pacific region and we are having those discussions with government at the moment,” the Australian Financial Review reported him as telling ABC Radio. “We would only do it if we believed it was in the best interests of our shareholders.”

Telstra’s AUS$2bn bid for Digicel Pacific would be backed with a loan from the Australian government.

Digicel hired Citigroup late last year to advise on a possible sale of its Pacific business, spanning Papua New Guinea to Fiji, Samoa, Vanuatu Tonga and Nauru, after receiving a number of unsolicited approaches for the unit.

Chinese-owned telco operators, including China Mobile and ZTE, are also reportedly interested in buying Digicel Pacific, which has 3G and 4G mobile phone networks and access to undersea cables.

Australian media has previously reported that senior figures in the Australian government are concerned about China’s interest in communications infrastructure in the region.

Mr Penn said the government had its “own interests” in Digicel.

Telstra informed the stock market last month that it was in discussions to buy Digicel Pacific in partnership with the federal government.

“Telstra was initially approached by the Australian government to provide technical advice in relation to Digicel Pacific, which is a commercially attractive asset and critical to telecommunications in the region,” said Telstra in the statement.

“If Telstra were to proceed with a transaction, it would be with financial and strategic risk management support from the government. In addition to a significant government funding and support package, any investment would also have to be within certain financial parameters with Telstra’s equity investment being the minor portion of the overall transaction.”

Business Today

Get the latest business news and commentarySIGN UP HERE