Existing Telstra entity to become fixed infrastructure group in restructure
Telstra has filled in some of the details of its planned restructuring that will see the company split into fixed, tower, and service entities.
The company said on Monday it would be creating an arm to hold its international assets, that would sit alongside its InfraCo Fixed, InfraCo Towers, and ServeCo units.
As announced in November, InfraCo Fixed would own and operate passive fixed infrastructure such as ducts, fibre, data centres, and exchanges; the InfraCo Tower business will own and operate passive tower assets; and ServeCo that would remain as the bulk of Telstra, owning its retail business, active electronics and radio access network, spectrum, as well as offering services and products to customers.
However the existing Telstra corporate body will be parked into the InfraCo Fixed unit, with the new holding entity to enter into debt cross guarantees with InfraCo Fixed, and assets shifted out from the fixed unit to the service unit. Telstra said existing debt will sit with InfraCo Fixed, and be refinanced by the Telstra holding company, with no chance in debt levels expected.
Should the fixed business be sold, the company expects the guarantee would be released.
"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," it said.
"Telstra looks forward to consulting with debt holders on the proposed structure."
The international business will be taking responsibility for subsea cables from the fixed unit, as well as overseas assets that are transferred as approvals are gained.
CEO Andy Penn said the company was talking to the federal government and regulators on how it would meet its regulatory obligations, which would include its arrangements with NBN Co.
Penn added Telstra would kick off a "process for external strategic investment" in InfraCo Towers early in the 2022 fiscal year, and is expecting binding offers during the second quarter of FY22.
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