The NBN Co has rejected Telstra’s plan to sell $5 billion of future NBN revenue to its investors.
After announcing full year results in August, Telstra revealed plans to develop an investable product based on future income streams it would receive from NBN compensation and access payments.
Andrew Penn, Telstra’s Chief Executive, formerly stated the arrangement would be valued around $5 billion to $5.5 billion, noting that $1 billion would be used to reduce debt levels, and the remaining 75% of NBN income used for shareholder returns.
Today, Telstra received word notice that “technical consent from NBN Co will not be forthcoming”.
“Essentially we can’t see how NBN Co’s position can be protected/improved by Telstra’s securitisation plan, especially given the unpredictability of our operating environment in the 2020s“.
Telstra has reportedly been testing the plan on the investor market since June, however, needed the NBN Co and government to offer their consent.
Regardless of the outcome, Telstra states progress thus far has “shown the value” of future revenue, some of which has been contracted until 2045.
Telstra has not provided an indication as to whether it will pursue other funding for the stated purposes.
