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Telstra Stake Sale Fails to Get Green Light
The Wall Street Journal
Wednesday, August 23, 2006

CANBERRA, Australia -- The Australian government failed to give the green light to a proposal for the US$17 billion sale of its remaining 51.8% stake in telecommunications company Telstra Corp.

The cabinet discussed the proposed sale, but didn't sign off on the deal.

"The matter remains under consideration," said a spokesman for Prime Minister John Howard.

People familiar with the situation said Canberra is considering a scaled-back sale, with an offering that would raise about 10 billion Australian dollars (US$7.63 billion) from retail and institutional investors. The rest of the government's stake would go into a fund set up to meet public-service pension liabilities.

Telstra shares fell six Australian cents, or 1.7% to A$3.45 in domestic trading yesterday.

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