- Telstra (TLS) has mapped out the next steps for its proposed legal corporate restructure, which it expects to complete by December
- The changes will reportedly enable Telstra to better realise the value of its infrastructure assets, take advantage of monetisation opportunities and create additional value for shareholders
- Under the proposal, subsidiary InfraCo Fixed is set to own and operate Telstra's passive or physical infrastructure assets
- Meanwhile, InfraCo Towers will own and operate the company's passive or physical mobile tower assets, which Telstra is on track to monetise
- In addition, ServeCo will own the active parts of the network to ensure Telstra continues to maintain its mobile coverage
- The company intends to establish its international business under a separate subsidiary within the Telstra Group, in order to keep it together as one entity
- The restructure also proposes the establishment of a new holding company for the Telstra Group, in which shareholders will own shares on a like-for-like basis
- Telstra intends to set up the new holding company — and transfer relevant assets into ServeCo — through schemes of arrangement
- The telecommunications provider will seek shareholder approval for the schemes at its October AGM and is set to release a schemes booklet in September
- Telstra shares are up 0.47 per cent, trading at $3.23 each
Telstra (TLS) is progressing plans for its proposed legal corporate restructure in an effort to complete the move by December this year.
The changes, it says, will allow the company to better realise the value of its infrastructure assets, take advantage of monetisation opportunities and create additional value for shareholders.
Under the proposed structure, InfraCo Fixed is set to own and operate Telstra's passive or physical infrastructure assets, including the ducts, fibre, data centres and exchanges that underpin its fixed telecommunications network.
Meanwhile, InfraCo Towers will own and operate the company's passive or physical mobile tower assets, which Telstra is seeking to monetise.
Further, under the structure, ServeCo would own the active parts of the network, including the radio access network and spectrum assets to ensure Telstra continues to maintain its mobile coverage.
Telstra intends to establish its international business under a separate subsidiary within the Telstra Group in order to keep that part of the business — including subsea cables — together as one entity.
The company will transfer its international assets to the new subsidiary over time, subject to approvals and stakeholder engagement.
In addition to creating the above subsidiaries, the structure proposes the establishment of a new holding company for the Telstra Group.
The set-up of this new holding company, alongside the transfer of relevant assets into ServeCo, will be undertaken through schemes of arrangement, for which Telstra intends to seek shareholder approval at its annual general meeting in October.
Following the restructure, shareholders will own shares in the new holding company on a like-for-like basis, with no change to their levels of ownership.
Telstra says it will continue to engage with stakeholders on the proposal and expects to release a scheme booklet in early September.
Telstra Chairman John Mullen said realising more value from the company's infrastructure assets is a fundamental pillar of Telstra's T22 strategy.
"Even before the COVID pandemic reminded us of the enormous importance of telecommunications infrastructure globally, we could see the opportunity to provide transparency of our assets and opportunities to deliver additional value for shareholders," he said.
"The legal restructure is a step toward that outcome. It also reflects the new post-COVID world we are living in and the fact that our assets are a critical part of the infrastructure that is enabling the nation's rapidly growing digital economy," John continued.
Telstra CEO Andrew Penn said the new legal structure will mark an important milestone in the T22 strategy.
"We started setting up InfraCo almost three years ago and what has happened since as only reinforced the importance of the strategic decisions we made at the time," Andrew said.
"The new structure has been chosen as it delivers a modern, optimal longterm portfolio structure for the Telstra group of businesses, which will maximise flexibility and value realisation of our assets, and deliver optimal outcomes for the Telstra Group as a whole."
Meanwhile, the proposed monetisation of InfraCo Towers remains on track.
"We plan to commence the process for external strategic investment into InfraCo Towers early in the 2022 Financial Year, with blinding offers to be submitted in the second quarter," CEO Andrew Penn added.
Telstra shares are up 0.47 per cent, trading at $3.23 each at 10:55 am AEDT.