Telstra hit a new five-year low today after a finance deal with the NBN fell through

Cameron Spencer/Getty Images

Australia’s biggest telco has given up on plans to raise up to $5.5 billion from the payment stream it gets from the NBN (National Broadband Network).

A short time ago, the shares were down 5.8% to $3.61. Telstra shares also traded ex-dividend today.

When announcing its annual results earlier this month, Telstra said it was looking at monetising recurring NBN receipts in a deal valued at between $5 billion and $5.5 billion.

The cash flow from NBN receipts is expected to grow to about $1 billion a year by the end of the NBN migration. The plan was to sell this cash flow for a capital return now.

Telstra said it would use the cash to reduce debt by about $1 billion, with the rest to go to shareholders.

The deal was seen as a balance for shareholders after Telstra cut dividends by almost 30%.

However, today Telstra told the market it had been knocked back by the NBN.

“While the proposal is well progressed and supported by equity and debt investors, Telstra has been advised this morning that technical consents from NBN Co will not be forthcoming,” the telco said in statement.

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