© Reuters. FILE PHOTO: A man looks at his phone as he walks past a Telstra logo that adorns a phone booth in the Central Business District (CBD) of Sydney, Australia, Feb.13, 2018. REUTERS / David Gray / File Photo
(Reuters) – Telstra Corp Ltd announced Monday that it is in talks to purchase the Pacific business of telecommunications company Digicel Group with support from the Australian government, which will likely fund the majority of the transaction amount.
The announcement follows a report by the Sydney Morning Herald over the weekend https://www.smh.com.au/business/companies/government-and-telstra-make-2-billion-offer-for-pacific-telco-assets – 20210716-p58adw.html, which said the deal could be worth A $ 2 billion ($ 1.48 billion) with the Australian government paying about A $ 1.5 billion.
Telstra (OTC 🙂 said it had been contacted by the government to initially provide technical advice on Digicel Pacific, which is "critical to telecommunications in the region".
The company added that if the deal were to go through, it would do so with "significant" government funding and support, while Telstra's contribution would be a "minor portion".
"The discussions are incomplete and there is no certainty that a transaction will be carried out," added Telstra.
Digicel Pacific is a leading telecommunications provider in Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu, Telstra said.
Its regional operations generated core earnings of $ 235 million with strong margins in 2020, the company said.
($ 1 = 1.3510 Australian dollars)
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