Wollongong City Council is set to sell off its shares in the regional telecommunications company Southern Phones, to allow a takeover bid from energy giant AGL to go ahead.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Council staff have recommended councillors vote next week to sell the city's two shares to AGL for $785,714.
The council will also receive a special dividend of about $90,000 if the sale goes ahead.
The council's initial investment in the company was $2 in 2001, when it was funded by two federal grants with the aim of delivering low cost telecommunication services to regional areas in south eastern NSW.
The council has received about $1.35M from Southern Phone dividends in the past 15 years, which it has directed towards natural area management and on-ground works.
However, council staff say Southern Phone has advised that, if the sale does not proceed, "they are unlikely to declare dividends in the foreseeable future and will likely need to raise capital".
Southern Phones announced the AGL takeover last month, with the energy giant proposing to acquire 100 per cent of shares.
The Southern Phone board unanimously recommended the acceptance of the AGL offer, saying this was in the best interests of shareholders. There are 34 other councils which will need to agree to sell their shares for the deal to go ahead.
Wollongong councillors will vote on the matter next Monday.
Kate McIlwain
For more than a decade, I've helped the Illawarra Mercury set the news agenda across the region. Currently I'm the paper's health reporter - covering the stories of Illawarra workers and residents in the wake of a global pandemic and at a time where our health systems are stretched to the limit.
For more than a decade, I've helped the Illawarra Mercury set the news agenda across the region. Currently I'm the paper's health reporter - covering the stories of Illawarra workers and residents in the wake of a global pandemic and at a time where our health systems are stretched to the limit.
