New Zealand's dominant telecommunications company Telecom Corp. announced a deal on Monday to sell its Australian arm AAPT to Sydney-based TPG Telecom for Aus$450 million ($411 million).
Telecom said the sale was part of a restructuring that involves the company, which in August posted a fall in annual net profit of almost 80 percent, focusing on its home market
Under the changes, Telecom is attempting to become more than a mobile and fixed-line infrastructure provider, branching out into areas such as entertainment and cloud computing to meet evolving demand.
“The sale of AAPT is consistent with this strategy and with our desire to focus principally on our New Zealand operations and on the needs of New Zealand customers,” chief executive Simon Moutter said.
Telecom paid about NZ$2.2 billion ($1.8 billion at current exchange rates) for AAPT when it bought the company under a deal announced in 1999 at the height of the dotcom boom.
However, its plans to expand into the competitive Australian market never took off and the New Zealand firm was forced to make large writedowns on its investment.
AAPT chief executive David Yuile said the Australian subsidiary was now well positioned after restructuring to concentrate on wholesale and corporate business.
“We are very energised by the progress we have made and the massive turnaround AAPT has experienced after several years of hard work and tough decisions," he said.
TPG said AAPT's extensive fibre optic network in Australia was a major asset for the company.
"(It) will further enhance TPG's position as an increasingly major force in the telecommunications market," chairman David Teoh said.
Telecom said the sale was expected to be completed by the end of February.
Telecom shares were up 1.97 percent in early trading on the New Zealand stock exchange, with the market up 0.12 percent overall.