Telstra chairman says deal with Digicel must be beneficial for shareholders

Telstra chairman John Mullen said the phone company would not buy the operations of telecom operator Digicel in the Pacific if it did not report to shareholders, although it continues to work with the federal government on an offer of $ 2 billion.

Speaking at the Australian Council of Superannuation Investors (ACSI) conference on Wednesday, Mr Mullen said the idea of ​​buying Digicel Pacific, owned by Irish billionaire Denis O’Brien, was not on track. Telstra’s radar and that the discussions that followed were undertaken because of government interest.

“Would this have been something that we would have gone further in the discussion with, if it was not in the interest of the government?” Probably not, ”Mullen said. “But if anything does result, it will be because we can meet both the government’s expectations and the financial returns to the company. If we can’t do both, it won’t happen.

Mr Mullen’s response is likely to appease shareholders and analysts alarmed that Telstra could be used as a foreign policy tool for the Morrison government to outbid China.Credit:Dominique lorrimer

“Telstra will not make any investment that does not make sense to its shareholders and will provide an adequate financial return. That said, can you help your sovereign government in time, especially if you are a critical infrastructure provider? , of course you can, ”he added.

While Mr Mullen’s comments highlight Telstra’s approach to any potential deal with Digicel, Prime Minister Scott Morrison has so far declined to explain how the offer, which involves a loan of $ 1, $ 5 billion from taxpayers, would be strategically beneficial for Australia.

The Sydney Morning Herald and Age revealed a $ 2 billion offer from Telstra and the federal government for Pacific operations Last Saturday, with the phone company preparing to contribute between $ 200 million and $ 300 million to the deal.

According to the government’s proposal, the national export credit agency, Export Finance Australia, would provide the rest of the money in the form of a loan. The sources, who are not authorized to speak publicly, said talks are still ongoing and ongoing and Telstra will reimburse the government at an interest rate of around 3%.

Mr Morrison suggested on Wednesday that financial assistance to secure the sale of Telstra would not be a waste.

“[Telstra] have business goals, which they pursue and I wouldn’t expect them to do anything that is not in their business interests, ”he told a press conference. “This is what shareholders are turning to. I’m sure that’s what they will do.

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