Telstra has sold its remaining 6.5 percent stake in Chinese online company Autohome to Chinese insurer Ping An Insurance Group for $29.30 per share, for a total of $217 million (AU$282 million).
“The divestment reflects Ping An is now well established as a strategic partner for Autohome,” Telstra said in a statement to the Australian Securities Exchange (ASX) on Thursday morning.
“As a result of the sale, Telstra’s nominee director to the Autohome board has resigned.”
Prior to the sale, Telstra CEO Andrew Penn said it would fund a capital management program of AU$1.5 billion for 2017.
“Most of the proceeds from this sale will be used to fund a capital management program of at least AU$1.5 billion to commence in the first half of the 2017 financial year,” Penn said.
“Autohome has been an excellent investment for Telstra, and we are pleased to have realised significant value for Telstra shareholders through this sale.”
The sale, which was first announced in April, originally saw Telstra retain a 6.5 percent stake in Autohome as well as one director on the board of the auto company.
The sale was made despite minority shareholders of Autohome filing a petition in court in May 2016 relating to Telstra’s attempt to sell the company.
“A petition has been filed in the Cayman Island courts by certain minority shareholders of Autohome relating to the sale of Autohome shares by Telstra to Ping An,” Telstra said at the time.
“Telstra intends to contest the petition.”
Autohome CEO James Qin had also made a bid alongside private equity firms Sequoia China and Boyu Capital and investment firm Hillhouse Capital to buy out Telstra’s stake for $31.50 per share.
Telstra has owned shares in Autohome since 2008, and has been investing significantly in the Asian region for the past few years, most notably acquiring Pacnet for $697 million in December 2014.
Australia’s incumbent telecommunications provider last week recorded a profit drop down 11.8 percent to AU$1.8 billion for the first half of FY17, citing “intense competition” as well as the impact of regulatory decisions.
Revenue was down by 6.4 percent to AU$12.8 billion, while earnings before interest, tax, depreciation, and amortisation (EBITDA) were down 1.6 percent, to AU$5.2 billion.
Penn said the company is still reviewing its strategy for the capital raised last year.
“We are also continuing to review our capital allocation strategy as announced in November last year, taking into consideration the long-term business and financial profile of Telstra,” the chief executive said.
“The review is looking at all aspects of our capital management framework.”