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Telstra Corp. Ld (50IM)

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Monday 01 July, 2002

Telstra Corp. Ld

Acquisition

Telstra Corporation Ld
1 July 2002


1 July 2002






Telstra obtains full ownership of Hong Kong CSL Limited



Telstra Corporation Limited ('Telstra') today announced changes to its Asian
joint venture arrangements with Pacific Century CyberWorks of Hong Kong 
('PCCW').



The key elements are as follows:



Original 2007 Convertible Note:



•         PCCW has redeemed in full the US$750 million 2007 Convertible Note
held by Telstra.  Telstra has valued this note on a yield to maturity basis at
US$750 million and adjusted the value in its accounts accordingly.  Telstra has
used the proceeds to acquire PCCW's 40% interest in Regional Wireless Company ('
RWC') and to subscribe for a US$190 million mandatorily converting secured note
issued by PCCW.



Regional Wireless Company



•         Telstra now owns 100% of RWC, which holds Hong Kong's premier mobile
phone company, Hong Kong CSL Limited ('CSL').

•         Telstra's accounts will reflect that the 40% interest in RWC
previously held by PCCW has a value of US$560 million.  After adjusting for 40%
of the cash in CSL, the effective acquisition value of the 40% interest in RWC
is US$475 million.



New Converting Note



•         PCCW has issued to Telstra a mandatorily converting secured note for
US$190 million, with a term of 3 years (expiring earlier if certain events
occur) and bearing compounding interest at a rate of 5% per annum.

•         The note is repayable in listed PCCW shares, but PCCW may redeem for
cash at any time.

•         Telstra may accelerate redemption in certain circumstances.

•         The conversion price for the note is calculated by reference to the
volume weighted average price of ordinary shares of PCCW as traded on the Hong
Kong stock exchange 20 days prior to repayment.

•         PCCW's obligations under the note are secured by an equitable mortgage
of shares over all of Pacific Century Cable Holdings Limited 50% shareholding in
Reach Limited.



Reach Limited



•         Reach Limited will continue to be a 50/50 joint venture between
Telstra and PCCW.







                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                

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