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SYDNEY, July 14 (Reuters) – Telstra Corp Ltd (TLS.AX) on Thursday stated it had accomplished the acquisition of Digicel Pacific, backed by funding from the Australian authorities, after a tax dispute between Papua New Guinea (PNG) and Digicel threatened to stall the sale course of.

Digicel in April stated it was contemplating authorized choices after PNG imposed a tax of just about $100 million that the Jamaica-headquartered telecom agency stated may have an effect on the deliberate $1.6 billion sale of its Pacific operations to Telstra. learn extra

“With respect to the Papua New Guinea extra firm tax, (Digicel) has made preparations to resolve the matter with the PNG tax authorities,” Telstra stated in a press release. “Telstra will not be a part of this course of, and the outcomes of this course of are a matter for (Digicel).”

Digicel stated in a press release that it had positioned $99.4 million in an escrow account pending a “binding worldwide arbitration course of” in Singapore with Papua New Guinea, which it stated had agreed to waive an extra PGK 50 million ($13.8 million) sought in respect of non-payment of the tax to this point.

The workplace of PNG Prime Minister James Marape didn’t instantly reply to a request in search of remark.

Telstra in October 2021 agreed to purchase the Pacific operations of Digicel, with the Australian authorities offering $1.33 billion and Telstra contributing $270 million.

Digicel, based by Irish billionaire Denis O’Brien, is the most important cell phone service within the Pacific, with about 2.8 million subscribers and has operations in international locations together with Fiji, Samoa and Vanuatu – essentially the most profitable being these in PNG.

Australian International Minister Penny Wong stated her authorities’s help for the deal “displays our dedication to assist construct a stronger Pacific household by way of funding in high-quality infrastructure.”

Earlier than the deal was introduced, there have been market and media hypothesis of Chinese language firms concerned with making a bid, which might have been a reason for concern for Australia amid rising competitors between ally america and China within the Pacific.

The announcement by Telstra comes as leaders of the Pacific international locations meet in Fiji for a four-day summit the place local weather change and tensions between Washington and Beijing have dominated conferences. learn extra

China is seeking to forge better ties throughout the area, proposing a broader commerce and safety cope with 10 Pacific nations that recognise Beijing, however which is opposed by some nations.

($1 = 3.6166 kinas)

Reporting by Renju Jose; Further reporting by Conor Humphries in Dublin; Modifying by Christopher Cushing and David Evans

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