Australian Fin Min Calls For Calm Ahead of Telstra Sale

MELBOURNE -(Dow Jones)- Australian Finance Minister Nick Minchin called Monday for an end to a row between the government and Telstra Corp. ahead of the sale of A$8 billion of the company's shares.

Prime Minister John Howard and Treasurer Peter Costello have been trading blows with the company over chief executive Sol Trujillo's A$8.7 million salary and the government's move to appoint Geoff Cousins to the Telstra board.

As the government's A$20 million advertising campaign to promote the sale got underway Monday, Minchin called for an end to the conflict.

"Obviously I would prefer that there was some clear air," he told ABC National Radio.

"This is an A$8 billion offering, it's important to everybody that it succeeds, so my advice to everybody is to focus single-mindedly on this offering and ensure that it does succeed and I trust that that will be the case from now on."

In contrast to the heated exchanges between the government and Telstra last week, Minchin said the company had been "cooperating superbly" in the run up to the sale.

Minchin, who is the minister responsible for the sale of around one third of the government's remaining 51.8% stake in the telco, backed the board's appointment of Trujillo as the best man to lead the company forward.

"He has brought, I think, a new dynamism to the company, a real customer focus to the company," he said.

"He's turning what is an old government department, the PMG, into a fully-fledged, highly competitive, globally oriented, commercial telecommunications company and, you know, the company does face challenges."

Minchin also supported the government's nomination of former prime ministerial adviser and advertising executive Cousins to the board and said he was confident Telstra would see the wisdom of the move "in due course."

The prospectus for the sale, known as T3, is due out next Monday and Minchin said it will detail a discount for retail investors and contain some form of entitlement for existing Telstra shareholders.

At 0350 GMT, Telstra shares were down one cent at A$3.70.

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4323;
alex.wilson@dowjones.com
-Edited by Graham Morgan

(END) Dow Jones Newswires"

Posted to the site on 2nd October 2006