PTGi wraps Australian operations sale to M2

Primus Telecommunications Group Inc. (NYSE:PTGI) has completed its $195.7 million sale of its Australian unit to M2 Telecommunications Group.

With the deal complete, PTGi put about $9.8 million in an indemnification escrow in the event that there are indemnification claims by M2 following the closing.

The service provider's board of directors is now considering how it will use the proceeds from the sale, including new capital investments, note repurchases or redemptions, special dividends and share repurchases.

In addition to its Australian operations sale, the service provider's special committee is examining a number of options for the company, including a sale, merger, joint venture agreements, or the sale or spinoff of other PTGi business units.

The timing of the deal was interesting because it happened after it established a wholesale agreement to offer services via Australia's National Broadband Network in January. This agreement would have enabled it to compete with incumbent Telstra.

Meanwhile, Primus Canada has been divided up into two different organizations: a data center business and another serving residential and business customers.

June 3, 2012

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