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Telstra makes $A561m profit from $A2.03bn sale of CSL

Telstra makes $A561m profit from $A2.03bn sale of CSL

Hong Kong mobile business sold to maximise return

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Telstra has made $US1.99 billion for its 76.4 per cent stake in CSL, having completed the sale of the Hong Kong-based business to HKT Limited on May 14.

The Australian telecommunications giant said that about $A561 million of the sales proceeds will represent profit, subject to completion accounts and audit.

As part of the sale HKT also acquired the remaining 23.6 per cent shareholding held by New World development.

Telstra announced it would sell CSL in December 2013, claiming that exiting Hong Kong would maximise shareholder value.

“CSL has been a strongly performing business, the compound annual revenue growth rate was 9.4 per cent over the last three years and we have gained market share,” Telstra chief executive officer (CEO), David Thodey, said at the time.

“[CSL] has established itself as a premium brand and strong player in the market, last year adding 425,000 mobile customers.”

“However, there are a number of dynamics in the Hong Kong mobiles market that means this is the right opportunity for Telstra to maximise our return on this successful asset.”

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CSL reported $A1.05bn unaudited year-to-date operating income and earnings before interest, tax, depreciation and amortisation (EBITDA) of $A261m, both of which will be consolidated in Telstra’s fiscal 2014 results.

The net proceeds are incremental to Telstra’s free cashflow guidance of $A4.6bn to $A5.1bn in fiscal 2014, which excludes any proceeds on the sale of businesses.

Telstra said it will now consider the net proceeds from this transaction, consistent with its capital management framework and will provide a further update to the market when it announces its full-year results in August.

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