Following April’s rumors around the potential sale, Telecom New Zealand, a New Zealand-based telephone Company and internet provider, proved the rumors true, on Friday, by selling its consumer business of AAPT, the third-largest telecommunication Company in Australia, to internet provider, iiNet, for A$60 million, which is equal to $54 million.
As a result of this transaction, iiNet’s business would encompass an additional 120,000 broadband and 230,000 voice customers on its original business.
TL. NZ had full control over AAPT in 2000, raising the shares stake of 78%, already purchased in 1999, to 1000%. TL. NZ spent NZ$3 billion on the acquisition of the Company and on initiating its strong line of business. However, the wholly-owned subsidiary ended up to be "non-core" to TL. NZ’s business, according to Paul Reynolds, the Company's Chief Executive.
TL. NZ has previously announced putting the whole AAPT shares for sale, but reconsidered the offer, after many buyers raised complaints regarding the price.
Moreover, TL. NZ announced the divesting of its 18.2% shares in iiNet, for A$70 million. This announcement resulted in iiNet’s sales raising to A$2.80 a share.
Chief Reynolds also added that these transactions would eventually, “strengthen Telecom's financial position, and help reposition AAPT's operations into a focused, network-centric wholesale and corporate business that is well-positioned for future growth".
