NZ Telecom faces AAPT sale loss
Even if the Sydney-based AAPT fetches an estimated price of $400 million, NZ Telecom is still expected to be down about $2 billion of shareholder money.
NZ Telecom bought AAPT in 1999 at the height of the internet and telecommunication bubble.
AAPT spokeswoman Louise Di Francesco said the company would not comment on market speculation.
Craigs Investment Partners director Geoff Zame said the loss in shareholder value could run into the billions of dollars for NZ Telecom shareholders over the past decade.
Mr Zame said AAPT could be a hard sell for potential buyers. "It has not proved to be attractive to potential buyers in the past. That is not to say, in an NBN world, should that eventuate, it might not have some attractions for the future."
He said aggregate services providers such as TPG could be interested in AAPT assets. AAPT's most prized asset is more than 10,000 kilometres of fibre, which connects cities throughout the country.
Frequently Asked Questions about this Article…
New Zealand Telecom is considering selling AAPT because it has been an underperforming unit, and previous attempts to sell it were unsuccessful. The company aims to recover some shareholder value despite expecting a significant loss.
AAPT is estimated to fetch a price of around $400 million if sold, although this would still result in a substantial loss for New Zealand Telecom.
New Zealand Telecom purchased AAPT in 1999 during the peak of the internet and telecommunications bubble, but the exact purchase price is not specified in the article.
AAPT could be a hard sell due to its past lack of attractiveness to potential buyers. However, in a future NBN world, it might have some appeal.
Aggregate services providers like TPG could be interested in AAPT's assets, particularly its extensive fibre network.
AAPT's most prized asset is its more than 10,000 kilometres of fibre, which connects cities throughout the country.
The performance of AAPT has led to a significant loss in shareholder value for New Zealand Telecom, potentially running into billions of dollars over the past decade.
There is market speculation that AAPT is on the auction block again, but the company has not commented on these speculations.
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