Futuris Corporation Limited (FCL) said it had sold its 50% stake in Amcom Telecommunications (AMM) to reduce the company’s debt. The sale comprises of 170 million shares, totalling $48.5 million.

The company said the institutional selldown was successfully completed this morning at 17c per share.

”Proceeds will be applied to debt reduction and the divestment will have a total net debt reduction benefit to Futuris of approximately $64 million,” Futuris said.

Futuris said that the institutional selldown reduced the company’s total stake in Amcor to 18.6%.

Amcor said it would look to buy back and cancel the remaining 99 million beneficially held by Futuris for $19.6 million, subject only to shareholder approval.

Futuris chief executive Les Wozniczka said that the transaction was another step forward in the company’s strategy of divesting non-core assets and concentrating resources on its performing rural and regional operations.

“Accordingly we are realising our capital and reapplying it to our strategy of debt reduction and in reinvestment in our core performing rural and regional assets,” Mr Wozniczka.

Mr Wozniczka said the reason the company sold their shares was due to the decision made by the incoming federal government to cancel funding for the OPEL rural and regional broadband network, which meant that pursuit of our telecommunications strategy became untenable, and the Amcom shareholding non-core.

Amcom chairman Tony Grist said their relationship with Futuris, and in particular, the services of Mr Wozniczka, have been extremely valuable over the last five years, supporting the company’s growth from revenues of $20 million in FY04 to $44 million in FY08.

At 1533 AEST shares in Futuris were up 2c to $1.40, while Amcom shares were down 0.5c to 19c.