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TLS, TELSTRA CORPORATION LIMITED
toilet
post Posted: Mar 18 2004, 04:01 PM
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TLS: Front page of the SMH and thus, impossible to ignore. This is (yet) another issue we’ve been banging the drum about for the past few weeks. The Herald has “broken” the story that TLS is in the throes of finalising a new business plan for Reach and that it may result in a bail out of sorts. Now, importantly, this is NOT NEW NEWS. we have actually met with the TLS CFO John Stanhope a week or so ago. He indicated THEN that the Reach business plan for 2004 would be finalised in the next 10 days (ie: before the end of this week). John highlighted 3 possible scenarios in relation to the future of the business: They were: 1) The Reach asset is placed in Receivership - Telstra buys back its share of the assets: We estimate A$400-600m (assumes the banks take a haircut on the US$1.2bn loan). 2) Reach remains a going concern, however Telstra is forced to take a writedown on its A$191m receivable (pre-payment of capacity made in April 2003) combined with a likely renegotiation of the debt with the banks (Telstra may have to make a capital contribution). Lastly, 3) Reach remains a going concern, however Telstra commits to payment of Reach AJC obligations (A$64m in FY04, A$100m in FY05, A$100m in FY06: in real dollars, you’re looking at around US$220mn). What do we think? We believe the likely scenario rests with Telstra writing off its A$191m receivable and contributing capital to the value of A$150-200m to reduce the US$1.2bn loan outstanding (with the banks also taking a haircut). The key issue in the negotiations with the banks remains PCCW's ongoing interest in the venture (remember PCCW at their full year results indicated that they would contribute no further capital to the venture). I know TLS is going ex a nice divvie in a few days, BUT there is a trade-off to consider here. Fundamentally, the implications of TLS following Option 1 means it will in effect have negative earnings growth. I don’t think the full implication has hit the market yet…


 
kathy
post Posted: Mar 18 2004, 02:55 PM
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this is from the telecomasia.net site today


Telstra may take up stake in Malaysia's Maxis





March 18, 2004

Reuters

Telstra may fund a $1.2 billion bid by Malaysia's Maxis for smaller rival DiGi.Com, giving the Australian telco a foothold in Malaysia, a research report has suggested.

But its investment could come amid slowing growth in the Malaysian mobile market while bitter past experiences of foreign firms in the country may curb any excitement over such a deal, analysts and fund managers said.

None of the companies involved would confirm the report.

"We had one too many [bitter experiences]," said Nik Azhar Nik Abdullah of Commerce Asset Fund Managers.

Deutsche Telekom is still entangled in a $175 million arbitration claim against Celcom, a unit of Telekom Malaysia, almost a year after it sold out of the cellular phone firm.

In 2002, former Prime Minister Mahathir Mohamad blocked a 2.2 billion-ringgit offer by SingTel for a stake in Time dotCom.

A CIMB Securities report said Telstra would take a 20% stake in Maxis, Malaysia's top cellular phone firm by subscriber numbers.

Quoting unnamed industry sources, it said Maxis may pay between 5 and 6 ringgit a share for 61% of DiGi, currently held by Norwegian firm Telenor.

Based on Wednesday's close, that would represent a premium of between 12% and 34% on DiGi's price, valuing it at as much as 4.5 billion ringgit ($1.2 billion).

Maxis would issue new shares for the Telenor stake and for the rest of DiGi's stock and sell them to Telstra.

"We are as surprised as everyone else to hear this rumor circulating in the market," said a Maxis spokesperson.

"Hypothetically speaking, we will consider and evaluate potential investments that could bring and add value to our shareholders," the spokesperson added.

Telstra declined comment on the report and Telenor representatives were not available for comment.


Slowing Growth, Maturing Market

Malaysia's mobile phone subscriber base grew by about 20% to 11 million users last year, a penetration rate of 44% for a population of 25 million people, the third-highest ratio in Southeast Asia after Singapore and Brunei.

But growth is unlikely to match high double-digit figures achieved in the past as the market, worth some 10 billion ringgit in annual sales, nears saturation point at about 50%.

In contrast, Indonesia, which has a much bigger population, has a penetration rate of less than 10%, analysts say, making it a better bet for the Australian company.

Telstra, which is seeking to expand its overseas business amid a maturing local market, is one of the rumored bidders for Excelcomindo Pratama.

Still, the purchase of a 5% stake in Telekom Malaysia by Singapore's investment arm Temasek Holdings earlier this month, could be a catalyst for a Telstra-Maxis tie-up, Commerce's Nik said.

"The administration in Malaysia is more open toward foreign investment now," said Kenneth Tang, investment manager with Credit Agricole Asset Management.

Temasek's purchase has raised speculation that its unit SingTel may be allowed to buy a stake in a Malaysian phone company, probably Telekom's mobile arm Celcom.

COPYRIGHT: © Reuters 2004



 
texas4qld
post Posted: Mar 16 2004, 01:05 PM
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IN REPLY TO A POST BY smarttrade, Mon 15/03/04 02:25pm

And sell the strength laughingsmiley.gif

Thats me out again at $4.80.

Tex.



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The above comments are just my opinions, do your own research before deciding to buy or sell.
 
texas4qld
post Posted: Mar 15 2004, 02:32 PM
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IN REPLY TO A POST BY smarttrade, Mon 15/03/04 02:25pm

Buy the weakness biggrin.gif



--------------------
The above comments are just my opinions, do your own research before deciding to buy or sell.
 
smarttrade
post Posted: Mar 15 2004, 02:25 PM
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sell TLS

 
texas4qld
post Posted: Mar 15 2004, 02:24 PM
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IN REPLY TO A POST BY Smartman_plc, Sat 13/03/04 07:57am

Back in at $4.76.........some big boys selling it down unsure.gif

Hoping for one more run before X-div.

Tex.



--------------------
The above comments are just my opinions, do your own research before deciding to buy or sell.
 


Smartman_plc
post Posted: Mar 13 2004, 07:57 AM
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IN REPLY TO A POST BY kathy, Thu 11/03/04 05:48pm

I agree Kathy. I also saw that Terry McCrann was pushing that Sensis and other parts of Telstra would be outstanding separate floats.

I think that it is unlikely that the senate will allow a float of the whole of Telstra and public opinion is against it. However, the Senate may have no objection to floating off non-core parts of Telstra and leave the majority public owned part of Telstra as a straight telphone company. The top management probably wouldn't like it since they would be in charge of a smaller entity but I see it making great sense in terms of shareholder wealth and the government would get considerable funds without much (if any) voter backlash.



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Cheers,
Smartman
 
texas4qld
post Posted: Mar 12 2004, 09:15 AM
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IN REPLY TO A POST BY kathy, Thu 11/03/04 04:48pm

No real opinion from me Kathy, I leave that to Ziggy and his boys tongue.gif

I'm out today at $4.80.

Tex.



--------------------
The above comments are just my opinions, do your own research before deciding to buy or sell.
 
kathy
post Posted: Mar 11 2004, 04:48 PM
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IN REPLY TO A POST BY texas4qld, Thu 11/03/04 03:51pm

Yes, they feel that this aquisition will effect a share buyback, but I personally like the idea of dividing them and floating sensis, whats your opinion?
Have a good night
Kathy

 
texas4qld
post Posted: Mar 11 2004, 03:51 PM
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IN REPLY TO A POST BY kathy, Mon 08/03/04 09:39am

TLS got bashed in the papers for this aquisition, but the market seems to like it wink.gif
The opinion seems mixed. some brokers say hold, UBS says buy.....target price $5.50.

I think we'll see a run into X-Div followed by a sell off.
I see TLS as an outstanding long term buy, and will let a small parcel ride for the next year or two.

Tex.



--------------------
The above comments are just my opinions, do your own research before deciding to buy or sell.
 
 


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