Australian government to offload its 51.8 per cent stake in Telstra

25 August 2006

Mumbai: The Australian government is offloading its remaining 51.8 per cent stake in Telstra, the country's leading telecommunications company. The government proposes to divest about A$8billion (US$6.07billion) of shares to investors and park the rest in a special fund, a government statement quoting Prime Minister John Howard said.

A part of the stake will go to a `Future Fund', which has been set up to cover public service pension payments.

The statement said the government's majority interest in Telstra and role as the telecoms industry's regulator represented a conflict of interest.

The government's 51.8 per cent stake in Telstra is currently worth A$22.5 billion (US$17.07 billion).

Telstra had reported a fall in its net profit to A$3.2bn from A$4.3bn in the year to June 30, the lowest level since the group listed in 1997.

The share price has lost about a quarter of its value in the past year, amidst worries of lower earnings and declining revenues from fixed-line telephony and a regulatory woes.