Dear Telstra Members, Please see below explanation of Telstra’s proposed restructure.
TELSTRA’S PROPOSED LEGAL CORPORATE RESTRUCTURE AS PER MARKET RELEASE STATEMENT:
Telstra announced the next steps in its proposed legal restructure to enable it to better realise the value of its infrastructure assets, take advantage of potential monetization opportunities and create additional value for shareholders. The proposed legal structure within the Telstra Group, expected to be completed by December 2021, includes the following:
· InfraCo Fixed, which would own and operate Telstra’s passive or physical infrastructure assets: the ducts, fibre, data centres, and exchanges that underpin Telstra’s fixed telecommunication network. This will provide important optionality to create additional value form these assts in the future.
· InfraCo Towers, which would own and operate Telstra’s passive or physical mobile tower assets, which Telstra is looking to monetise given the strong demand and compelling valuations for this type of high-quality infrastructure.
· ServeCo, which would continue to focus on creating innovative products and services, supporting customers and delivering the best possible customer experience. ServeCo would own the active parts of the network, including the radio access network and spectrum assets to ensure Telstra continues to maintain its industry leading mobile coverage and network superiority.
Telstra also intends to establish its international business under a separate subsidiary within the Telstra Group to keep that part of the business, including subsea cables together as one entity. The international assets will be transferred to the new subsidiary over time subject to relevant approvals and engagement with appropriate stakeholders.
The announcement sets out the process to enable the legal restructure, including:
· The establishment of a new holding company for the Telstra Group.
· The creation of separate subsidiaries including InfraCo Fixed (which will be the existing Telstra Corporation), InfraCo Towers, ServeCo and Telstra International, and transferring the relevant assets into InfraCo Towers and ServeCo.
· It is proposed that the establishment of the new holding company and the transfer of the relevant assets into ServeCo be undertaken by way of schemes of arrangement, and Telstra intends to seek shareholder approval of these schemes at this year’s AGM in October. Following the restructure, Telstra shareholders will own shares in the new holding company on a like for like basis with no change to their ownership levels.
Stand by for announcement next week for dates of next member meetings.