As the investor base around the Tasman shrinks, telecommunications behemoth Telstra will delist from the New Zealand stock exchange.
As part of a bold strategy to boost its finances, the cash-strapped telecommunications behemoth has made a major decision about the stock exchange.
Telstra will delist from New Zealand's stock exchange as part of a broader strategy to streamline operations and slash costs, with the telecommunications behemoth anticipating this fiscal year to be a landmark moment.
Telstra reported on Friday that it would delist from NZX Ltd on June 16 at the close of business and then switch to a single listing on the Australian Securities Exchange, citing dwindling Kiwi shareholder numbers.
“Given the ASX's accessibility to New Zealand-based shareholders, Telstra believes delisting is the logical next step,” the telco said.
Telstra said it was part of a campaign to streamline its shareholder services and simplify administration.
Telstra shareholders on the NZX would have their shares automatically converted to the ASX.
The company issued an update on its decision to break the company into four entities earlier this week, primarily to better realize the importance of its infrastructure properties.
In early September, an independent expert's recommendation is expected to be issued.
Telstra claims that if the plan goes forward, it will be completed by December.
Telstra's strategy to reduce debt was necessary to compensate for the earnings gap caused by reduced retail margins and the loss of its controlled wholesale earnings stream during the national broadband network rollout, according to Moody's Investors Service on Thursday.
Telstra was harsh in its response to NBN Co's request for input on its new two-year pricing plan, which was released on Thursday.
Telstra believed NBN Co was still overcharging retail service providers, and that its latest pricing plan would result in NBN Co "taking a higher share of industry revenues, potentially to the detriment of home and business broadband consumers."
“As NBN Co is aware, at the current wholesale charge of $22.50, margins on our entry-level NBN plans are still unsustainable,” Telstra said.
“The cost... will need to be closer to $10 to allow RSPs to sustainably deliver an affordable broadband plan for low-income customers.”
Telstra's stock has swung wildly in the last year, peaking at about $3.50 in July and plummeting to less than $2.70 in October, just before the restructure plan was announced.
On Friday, investors reacted favorably to the delisting news, driving the stock up 3% to $3.43 in intraday trading.
Telstra posted a 2.2 percent decline in half-year profit last month, owing to a nearly 10% drop in sales.