[AusNOG] NBN - Negotiations with Telstra - update from DeLimiter

[Nathan Sullivan]

Good point, considering the 8% dividends from TLS... if they can keep those
up they would be fine :)


On Mon, Sep 9, 2013 at 4:39 PM, Matthew Moyle-Croft <mmc at mmc.com.au> wrote:

> If you're the Australian government and can borrow the money through
> bond sales (look at the current rates for bonds) then given how
> profitable Telstra (look at dividends and free cash flow etc) is you'd
> make a profit on holding it.
>
> So, reality is it doesn't matter how long other than your particular
> political views on governments borrowing money to invest etc etc.
>
> But you'd hope that you could do it fairly rapidly.  Keeping "an" NBN
> on track is important.
>
> MMC
>
>
> On Sun, Sep 8, 2013 at 11:19 PM, Nathan Sullivan <nathan at nightsys.net>
> wrote:
> > Interesting...
> >
> > The main interesting part of that equation would be how long does the
> Govt
> > have to "hold" Telstra and repay debt to facilitate the split into
> InfraCo +
> > other entities before it can sell them off and repay debt/s... in terms
> of
> > time = interest payable. 6 months? 12 months?
> >
> > Theres probably a lot of legacies, in terms of systems, asset registers,
> > payroll splits that would need to be dealt with during that time.
> >
> > Nathan.
> >
> > On Mon, Sep 9, 2013 at 4:17 PM, Matthew Moyle-Croft <mmc at mmc.com.au>
> wrote:
> >>
> >> Also,
> >> Govt already promised to pay Telstra ~$11B or so to move customers
> >> across - if buying Telstra and splitting it costs you that or less,
> >> then you're winning.
> >>
> >> On Sun, Sep 8, 2013 at 10:20 PM, Matthew Moyle-Croft <mmc at mmc.com.au>
> >> wrote:
> >> > On Sun, Sep 8, 2013 at 8:29 PM, Martin - StudioCoast
> >> > <martin.sinclair at studiocoast.com.au> wrote:
> >> >
> >> >> What are others thoughts on this? What other cost saving measures are
> >> >> out
> >> >> there?
> >> >>
> >> >
> >> > Go the insane private equity (but government) approach:
> >> >
> >> > 1. Borrow money from markets on short term basis to repurchase Telstra
> >> > from existing shareholders. (need AU$60Billion + premium).
> >> > 2. Break Telstra down into component parts - including one
> >> > owning/running the last mile (Cu, ducts, Exchange buildings, HFC etc).
> >> > "InfraCo"
> >> > 3. Sell all the bits other than InfraCo - probably worth about the
> >> > right amount to pay back money borrowed as no longer encumbered with
> >> > ugly bit of last mile that needs mucking with, if not, lumber Infraco
> >> > with the debt.
> >> > 4. Setup InfraCo to do what it needs to building whatever you need to
> >> > build.  It owns everything it needs and is govt owned.  No negotiating
> >> > with anyone.  Don't have to argue about technologies etc.  It can have
> >> > a look at what it's got and do what it needs to do relative to a
> >> > political dictum about services it needs to provide.
> >> >
> >> > So, money's pretty cheap to borrow internationally for short term.
> >> > Australia has AAA ratings so borrowing it should be pretty
> >> > straightforward.  InfraCo remains initially government owned so AAA
> >> > rating is fine.
> >> >
> >> > Given the "cost" is really just what the difference is between
> >> > acquiring Telstra and then selling the bits InfraCo doesn't need it's
> >> > probably cheaper.  Infraco starts with a customer base so you just set
> >> > it up so it can afford to roll out high speed over X timeframe.  Also
> >> > means that if you want to sell it then you have no issues other than
> >> > selling a govt monopoly which is a problem we already have.
> >> >
> >> > MMC
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> >
> >
>
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