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Telstra marks $1bn in monetisation through sell-off

By Cameron Micallef · August 19 2019
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Telstra
Telstra marks $1bn in monetisation through sell-off

Telstra marks $1bn in monetisation through sell-off

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By Cameron Micallef · August 19 2019
Reading:
egg
Telstra

As part of its monetisation strategy, Australia’s largest telecommunications provider has announced that it has partially sold its interest in an unlisted property trust.

According to a report, property group Charter Hall has paid $700 million to acquire a 49 per cent interest in the exchange properties, with the telco giant set to retain 51 per cent interest and operational control.

A statement outlined that the property group will lease back the exchanges to the Telstra corporation as part of the deal.

Combined with recent changes to Telstra Ventures, the sales of the Edison Exchange building in Brisbane and other smaller transactions, the new announcement will add nearly $1 billion in monetised assets to Telstra’s portfolio. 

According to the telecom’s CEO, Andrew Penn, the agreement gives further progress to the fourth pillar of the company’s T22 strategy, the company’s three-year plan.

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“When we announced our T22 strategy in June 2018, it included goals of monetising up to $2 billion of assets to strengthen our balance sheet… Today’s agreement, when completed, will take us to around the $1 billion mark,” he outlined. 

In purchasing the trust portfolio, Charter Hall has said the consortium owning the assets will be comprised 50 per cent by Charter Hall Long WALE REIT, 28.2 per cent by a wholesale capital partner and 21.8 per cent by Charter Hall Group.

The $261 million raising for the Charter Hall and Long WALE REIT was conducted by investment banks JPMorgan and UBS, with the later bank also advising Telstra on the disposal.

Charter Hall managing director and group CEO David Harrison said “the creation of this partnership continues Charter Hall’s successful growth of new partnerships and funds while further extending the group’s long WALE investment strategy.

Nest Egg previously reported Telstra’s full-year results, which showed that the telco’s profits fell by 40 per cent.

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