Australia's Telstra: CEO Remians Confident On Asian JV
September 1, 2001
Dow Jones Newswires
SYDNEY -- Telstra Corp. (TLS), Australia's largest telecommunications company, said Sunday it remains confident its Asian joint venture with Hong Kong's Pacific Century CyberWorks Ltd. (H.PCW) remains on track despite a recent A$1 billion write-down.
"We're actually very confident going forward," Ziggy Switkowski, Telstra's chief executive, told the Nine Network's Business Sunday program. "We have all sorts of options and alternatives that provide us with interesting opportunities but there is no sign at all from our perspective of PCCW's fragility."
Last week, Telstra reported a A$1 billion write-down in the value of Regional Wireless Co., a joint venture with PCCW that was formed in March. Telstra, which paid its partner US$1.68 billion to obtain 60% control of the venture, said it made the adjustment to assign a "fair contemporary value" to the asset amid plunging valuations of mobile-phone companies globally.
"There's no intention take any further write-downs - I mean that's a big enough hit as it is," he said.
The partnership owns CSL, the company that holds the mobile phone assets of Hong Kong Telecom. Telstra had foreshadowed the writedown recently in meetings with journalists and analysts. PCCW owns the remaining 40%.
Switkwoski said Telstra has arrangements in place should PCCW opt to divest its stake, but said that is unlikely any time soon.
"We're one step removed from the pressures and the challenges on the PCCW parent but we do have arrangements in place that give Telstra lots of confidence about how these joint ventures will evolve under any number of circumstances," he added.
-By Ambereen Choudhury, Dow Jones Newswires; 61-2-8235-2965; ambereen.choudhury@dowjones.com
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