TPG Telecom is set to return up to $3 billion to its shareholders following the completion of its $5.25 billion sale of its fibre network and fixed business to Vocus Group. The transaction generated approximately $4.7 billion in net cash proceeds for TPG, paving the way for a substantial capital return program.
The company intends to distribute the proceeds through a pro rata capital reduction of up to $1.61 per share. This move is contingent upon shareholder approval at an extraordinary general meeting slated for early October. In addition, TPG will offer minority shareholders the opportunity to reinvest their capital reduction proceeds into new shares, with a target of raising up to $688 million through this reinvestment option.
Furthermore, TPG plans to allocate approximately $2.4 billion of the proceeds to repay existing debt, significantly reducing its borrowings to around $1.7 billion. The TPG board anticipates maintaining the fiscal year 2025 dividend at 18¢ per share. Key strategic shareholders, collectively representing 77 per cent ownership, including CK Hutchison, Vodafone, and Washington Soul Pattinson, have indicated their support for both the capital return and reinvestment initiatives. TPG Telecom is a telecommunications company that provides mobile and fixed broadband services to consumers and businesses in Australia. It aims to be a leading provider of connectivity and digital services.
According to TPG chief executive Inaki Berroeta, the asset sale and subsequent capital management strategy positions the company as a ‘lean, mobile-led integrated telco’. This new financial footing will support further growth in the mobile and home internet markets.
