BT could take bath on Clear

By Deborah Hill Cone

Friday 9th November 2001

If number two telco Clear Communications is sold to Telstra for about $300 million, as the industry was expecting yesterday, British Telecom will have taken a deep bath on the investment.

That amount would not go far after paying off a $223 million intercompany advance BT has lent to Clear in the last year.

Earlier, in August 1999, BT injected $170 million into the telco and with its initial purchase price said to be about $430 million, BT would need to sell Clear for $733 million just to recoup that investment.

The "Telstra-is-to-buy-Clear" rumour is one of the longest-running pieces of speculation in the New Zealand market for years.

Back in late 1999 (NBR, November 12, 1999) it was reported a deal was due to be signed within a week. At that time the two companies were seen as a good fit as Telstra would get access to Clear's network which it has built up since entering the market in 1999.

It is believed an announcement is imminent that Telstra is to buy Clear. Owner BT's asking price believed to be about $400- $500 million.

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