New Zealand's Telecom unable to sell all of Australian asset

WELLINGTON, July 30, 2010 (AFP) - - New Zealand's largest listed company, Telecom Corp., said Friday it had to settle for selling only part of its Australian unit AAPT to rival iiNet.

Telecom, which said its preferred option was to sell the entire operation, will receive 60 million Australian dollars (53 million US) for the sale of its consumer division.

The Auckland-based telco also said it was selling its 18.2 percent stake in iiNet "to institutional and sophisticated investors" for 70 million Australian dollars.

When combined with the proceeds from the sale of Telecom's 10.1 percent stake in Macquarie Telecom announced earlier in the week the deals will generate approximately 140 million Australian dollars for Telecom.

Chief executive Paul Reynolds said the sales would strengthen the company's financial position and put AAPT into a better position for future growth.

Investors had been hoping the company would sell all of its AAPT business for more than 300 million Australian dollars, with many analysts describing it as an underperforming player in a market dominated by Telstra and Optus.

The sale of the consumer unit will reduce 2011 forecast earnings for AAPT by 10 million Australian dollars, Telecom said.