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The Australian government is likely to assemble four separate panels of banks to handle the sale of its remaining A$27bn (US$20.2bn) stake in Telstra, the country’s dominant telecoms company, it said on Thursday.

The decision means most of the banks lobbying for a role in the privatisation of “T3” can expect a share of the expected A$100m in fees.

The “beauty parade” for choosing which investment banks will work on the sale, which will possibly be the world’s largest ever equity offering, concludes in Canberra today when officials from the finance department hold final talks with lobbyists from the investment banks. The government is expected to announce the victors in mid-November.

To achieve maximum flexibility for a sale, Nick Minchin, telecoms minister, is expected to choose up to four banks to be joint global co-ordinators and project managers. Those tipped to win these mandates, the most lucrative, include UBS, Goldman Sachs and Macquarie Bank.

However, Mr Minchin is also considering appointing a panel of banks to sell equities in a book-building exercise to global institutional investors. Other banks are likely to be appointed to focus on the full market offering to domestic investors, with a fourth tier of banks focused on creating and selling hybrid debt products, such as convertible bonds, to overseas investors.

Ian Smith, the government’s Telstra spokesman, said it would be prudent for the government to keep its options open by retaining a large number of banks for different purposes. He said: “The market might change over the next 12 months and the government wants to retain maximum flexibility should the sale occur next year.”

The government is hoping to fully privatise Telstra by the end of next year, although it will make a final decision in March. It has refused to set a target price for the sale, mindful that domestic investors are nursing heavy losses on Telstra stock they own. The Telstra share price on Thursday night closed at A$4.10, around 40 per cent below the price of previous initial public offerings of T1 and T2 Telstra stock.

Meanwhile, a former Telstra executive on Thursday added to the political disagreements surrounding the sale by claiming that privatisation would lead to a reduction in the quality of services to rural parts of Australia.

Gavin Priestley, who until last week was general manager for the majority of rural services in the state of New South Wales, told a radio station that he feared a privatised Telstra would find it uneconomical to provide modern broadband and data services to the “bush”.

Mr Priestley claimed his concerns were shared by many executives at the company. He said: “I think there’s a few of us that can’t actually see how it’s going to work.”

Copyright The Financial Times Limited 2017. All rights reserved.
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