Telstra shareholders appear to have voted almost unanimously in favour of the $11 billion financial heads of agreement with NBN Co, following two year of negotiations around the deal.
Based on both the proxy and direct votes made at the company’s annual general meeting, the company has received the support of 99 per cent of shareholders, with the exact final result still to be determined.
Telstra chairperson, Catharine Livingstone, said the recommendation of the deal by the board had received strong support by shareholders.
“From the outset, we said we would put any proposal to cooperate with the NBN to shareholders – we consider the vote today as the most important step in the process we commenced over two years ago,” Livingstone said.
“We look forward to finalising the remaining conditions precedent, implementing the transaction and realising the benefits we expect to deliver, including the contribution to sustainable free cashflow in the medium term and greater regulatory stability.”
Livingstone said the final hurdle in the process was the approval of the structural separation undertaking (SSU) and migration plan by the Australian Competition and Consumer Commission (ACCC).
The watchdog flagged concerns around the SSU noting it could not accept a crucial aspect of Telstra's move to structurally split its retail and wholesale arms and that it was worried it had no compliance plan for the separation from 2018.
According to Livingstone, the telco has continued to work closely with the ACCC to resolve the issues around the plan would submit a revised SSU in coming weeks.
“We continue to believe that none of the issues raised by the ACCC in relation to the SSU is insurmountable and that they can be resolved in a way consistent with our principle of protecting shareholder value,” Livingstone said.
However, should any material changes occur, Livingstone said, shareholders will have the opportunity to consider the changes and vote.
“In considering the materiality of any changes, we will take into account the costs associated with their implementation and the degree to which the proposed transaction will continue to deliver greater regulatory certainty than the best available alternative.”
Numerous competing telcos have also opposed the SSU and lodged submissions to the ACCC discussion paper (PDF) around the separation.
Vocus Communications voiced concerns the deal could result in Telstra evicting the competition from its ducts in order to hamper competition, while Vodafone Hutchison Australia (VHA) also criticised the plan, stating it fails prevent Telstra from impeding competition and lacked the certain self-enforcing features it needed order to be credible and effective.
The shareholder vote has been long-awaited, with Telstra pushing the meeting, initially scheduled for 1 July, back to October.
Along with its half-year financial results, released in February, the Thodey said Telstra had "finalised key commercial terms" with NBN Co and had reached in-principle agreement with the Federal Government regarding the participation in National Broadband Network (NBN).
"We are working to complete the necessary documentation,” Thodey said at the time.
"As soon as this is finalised by both NBN Co and Telstra, Telstra will be able to provide detailed information on the substance of the proposal."
A non-binding heads of agreement was signed in June 2010, under which Telstra would receive $9 billion to lease its existing infrastructure to the network wholesaler, progressively decommission its copper network and cable broadband service and migrate customers to NBN Co.
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