Photo Credit: The Australian - Telstra CEO Andy Penn
According to a source, Australia's Telstra CEO Andy Penn visited the nation last month to negotiate the possible acquisition of Digicel Pacific.
According to the Australian Financial Review, Penn visited PNG to discuss the prospective purchase of Digicel Pacific with the country's political authorities.
Timothy Masiu, the Minister of Information and Communication, acknowledged Penn's visit but declined to say why.
“We will prepare a statement when the time is right,” he said.
Penn's three-day visit, according to the report, indicated that Telstra had "ramped up its due diligence" in order to "possibly work with the Australian government to acquire Digicel and help the government's goal of preventing the Pacific telco from slipping into Chinese hands."
According to individuals acquainted with the trip, he visited Prime Minister James Marape, Masiu, Australia's High Commissioner to PNG Jon Philp, and officials of Denis O'Brien, the Irish millionaire who owns Digicel.
In PNG, Fiji, Tonga, Vanuatu, Samoa, and Nauru, Digicel is the major owner and operator of 3G and 4G mobile phone networks.
The Australian government is willing to provide substantial loan financing to Telstra in exchange for an equity share in Digicel Pacific that would be a tiny part of the overall deal.
According to sources involved with the talks, a deal for Telstra to buy Digicel for around AU$2 billion (K5.11 billion) – including government debt – is likely to be completed before the end of the year.
When asked about Penn's journey to PNG, a Telstra spokesman indicated that the Digicel talks are "incomplete" and "it is not certain a transaction would proceed."
“Given the nature of these discussions, we are not able to say more at this stage other than any transaction will have to meet certain financial parameters,” the spokesman said.
“These include Telstra’s financial investment being the minor economic portion of the overall transaction, with all other capital being resourced on a non-recourse basis. Telstra would own Digicel with appropriate risk protections and consolidate it in our financial results.
“Digicel Pacific is a commercially attractive asset, enjoying a strong market position in South Pacific.”
Reference:
The National (9 September 2021). “Telstra ‘discussing’ with Digicel”.
