Australia’s TPG Telecom said on Tuesday it was planning to return A$3 billion ($1.94 billion) to shareholders from the cash proceeds of its recent sale of fibre and fixed network infrastructure assets to Macquarie-backed Vocus Group.
The telecom firm finalized its A$5.25 billion transaction with Vocus in July, generating net cash proceeds of A$4.7 billion.
It is offering minority shareholders an opportunity to reinvest their capital reduction proceeds into company shares, aiming to mitigate any reduction in free-float market value resulting from the shareholder payout.
The reinvestment plan is expected to raise A$688 million, lifting the company’s free float to about 30% from 23% at current share prices.
The company said it plans to repay up to A$2.4 billion in bank borrowings, using A$1.7 billion from the Vocus deal and A$688 million raised through the reinvestment plan.
“We anticipate strong free cash flow generation over the coming years due to service revenue growth, operating cost efficiency, capital expenditure reductions, and lower borrowing costs,” said CEO and managing director Iñaki Berroeta.
TPG, which reported net debt of A$6.26 billion in its latest annual report, expects lower annual earnings for fiscal 2025, as contributions from the divested fibre and fixed network assets will no longer be included.
The company now expects Pro Forma EBITDA for fiscal 2025 in the range of A$1.61 billion to A$1.66 billion, down from its previous estimate of A$1.95 billion to A$2.03 billion.
($1 = 1.5456 Australian dollars)
Reuters
