CANBERRA -(Dow Jones)- Australia's Finance Minister Nick Minchin said Wednesday the third tranche of the government's Telstra Corp. shares will be attractively priced.
However, he didn't elaborate on the pricing of the Telstra shares or what incentives will be offered to existing shareholders until closer to the October-November sale window.
"This will be an attractive offer," Minchin told CNBC television.
The government announced late Friday it will sell about one-third of its remaining 51.8% stake in Telstra in October and November.
About A$8 billion worth of shares will be sold to retail and institutional investors in the offer known as T3. The rest of the government's shares will be transferred to the Future Fund, an arm's length investment vehicle set up to meet future public service pension obligations.
"We'll be presenting this on the basis that it will be attractive to investors, both existing and non-existing shareholders," Minchin said.
"We've already announced that we will again be doing this by way of installments so investors will get the full benefit of the dividend immediately on their first installment and we're looking at other mechanisms to provide incentives for participation in T3."
Minchin said more details of the sale structure and the pricing of T3 shares would be provided when the offer was made in early October.
The Australian government began privatizing Telstra in 1997, when it sold one-third of its shares at A$3.30 each to retail investors and A$3.40 to institutional investors.
A second tranche of Telstra shares, representing another 16.6% of the company, was sold in 1999 at A$7.40 to retail investors and A$7.80 to institutions.
"T2 investors, who did buy in at the height of the dotcom boom, have seen - it's true - a diminution in the value of their shares but have benefited from quite handsome dividends over the period and those who want to manage their portfolio in a way to average down can do so," Minchin said.
The government announced it will proceed with T3 after securing a promise from Telstra that the company won't attack the regulator and campaign for policy changes during the sale.
Telstra this week said it will appeal an Australian Competition and Consumer Commission decision to reject the price it planned to charge rivals to gain access to its fixed-line network.
Minchin acknowledged Telstra management's unhappiness with the regulatory regime.
"You'd have to expect that whoever was running Telstra would feel uncomfortable with the regulatory regime," he said.
"After all, it is designed to optimize competition in telecommunications in Australia and Telstra was the previous monopoly provider."
Minchin said the government had no plans to change the telecommunications regulatory regime.
"We've indicated that regime will remain in place at least until the next review, which we've scheduled for 2009," he said.
-By Barbara Adam, Dow Jones Newswires; 61-2-6208-0901; barbara.adam@dowjones.com
-Edited by Graham Morgan
(END) Dow Jones Newswires"
Posted to the site on 30th August 2006
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