AUSTRALIA’s Telstra chief executive officer Andy Penn visited the country last month to discuss the planned purchase of Digicel Pacific, according to a report.
A report in the Australian Financial Review this week said Penn had visited PNG to discuss with its political leaders its planned purchase of Digicel Pacific.
Minister for Information and Communication Timothy Masiu confirmed Penn’s visit but declined to disclose the purpose.
“We will prepare a statement when the time is right,” he said.
According to the report, Penn’s three-day visit suggested that Telstra had “stepped up its due diligence to potentially partner with the Australian government to acquire Digicel and support the government’s goal of preventing the Pacific telco falling into Chinese hands”.
He met Prime Minister James Marape, Masiu, Australia’s High Commissioner to PNG Jon Philp, and representatives of the Irish billionaire owner of Digicel, Denis O’Brien, sources familiar with the trip told The Australian Financial Review.
Digicel is the largest owner and operator of 3G and 4G mobile phone networks in PNG, Fiji, Tonga, Vanuatu, Samoa and Nauru.
The Australian government is prepared to provide significant debt financing to Telstra, which would take an equity stake in Digicel Pacific that would be a minor portion of the overall transaction.
Sources familiar with the negotiations believe a deal for Telstra to buy Digicel for about AU$2 billion (about K5.11 billion) – including government debt – is likely before the end of the year.
Approached by the Financial Review about Penn’s visit to PNG, a Telstra spokesman said at the weekend that the discussions on Digicel are “incomplete and it is not certain a transaction will 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.”
The National