Telstra To Sell 49% Stake In New Unlisted Property Trust; Appoints UBS For $1.5b Sale

  • May 02, 2019 AEST
  • Team Kalkine
Telstra To Sell 49% Stake In New Unlisted Property Trust; Appoints UBS For $1.5b Sale

Telstra Corporation Limited (ASX: TLS) is engaged in providing telecommunication and information services and is a telecommunication carrier.

Telstra Corporation has appointed UBS to look for a buyer for a stake in a new unlisted property trust that would consist of 37 strategic telecommunication exchange sites situated in Australian capital cities and major metropolitan areas.

The buyer could have a 49 per cent stake in the trust which would be a hub of telecommunication exchange properties presently under ownership of the company. The sale is expected to be worth $1.5 billion.

On behalf of Telstra Corporation, UBS has started to initiate the discussions with the Australian and offshore real estate investors.

According to the sources, Telstra would retain its major shareholding in the new vehicle. The company will lease the property portfolio for a 21-year weighted average lease term back from the trust. However, the extension of the lease term would be possible as per the Telstra’s requirements.

During the lease term, the company will take charge of the all outgoings, repairs and maintenance and capital expenditure.

A similar co-investor process was run by UBS last year when Healthscope Limited (ASX: HSO), a company operating private hospitals and medical centres in Australia, was looking for a buyer for a 49 per cent stake in the sale of its 22 properties. Healthscope finally made a deal with two North Americans buying the company’s stake.

Telstra announced its property plans after a year since it’s Chief Executive Officer Andy Penn signalled the company’s plans to sell its assets worth $2 billion by the end of 2020.

In a recent announcement, Telstra has also waived off its long-standing monthly fee to unlock maximum speeds. This would enable the cable broadband customers to experience an unrestricted 100 Mbps speed this month. Around 500,000 customers would be at an advantage from this free speed boost.

At the end of March, the leading telecom company paid interim dividend of 8 cps (fully franked) incorporating an ordinary interim dividend of 5 cents per share and a special interim dividend of 3 cents per share.

The company released its half-year results for the financial year 2019 on 14th Feb 2019. The results indicated a strong performance of the company in customer numbers over the six months. The company reported a total income of $13.8 billion on a reported and guidance basis. The Net Profit after Tax stood at $1.2 billion. Also, EBITDA was recorded at $4.3 billion on a reported basis and $4.7 billion on a guidance basis excluding the restructuring costs.

During the half-year period, the company added around 239K retail postpaid mobile services and 125K wholesale mobile services that included both postpaid and prepaid.

The company’s stock is currently trading at AUD 3.355 (at 02:14 PM AEST, 2nd May 2019), down by 1.324% than the previous day’s stock price. ~7.6 million number of shares are currently in circulation today while 11.89 billion shares are outstanding. The 52-week high and low value of the stock is AUD 3.460 and AUD 2.547 respectively.


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