By Rishav Chatterjee and Rajasik Mukherjee

(Reuters) -Australia's TPG Telecom plans to use A$4.7 billion ($3.04 billion) cash from the sale of its fibre and fixed network assets to repay debt and boost the liquidity of its shares to maintain its presence in the S&P/ASX 200 benchmark, it said on Tuesday.

Australia's third-largest telecom firm will use proceeds from the sale of assets to Macquarie-backed telecom group Vocus to return up to A$3 billion to shareholders by executing a cash distribution where shareholders would receive up to A$1.61 per share.

Separately, TPG said it plans to offer its minority shareholders a chance to reinvest A$688 million, which is expected to raise the firm's free float to around 30% from 23%, supporting its weight on the ASX 200 benchmark.

The company did not provide any details on the pricing for the reinvestment plan.

It said it is also targeting to reduce its bank borrowings by repaying debt of up to A$2.4 billion.

"The issuing of new shares to raise up to A$688 million should be value-accretive for TPG's balance sheet through using the funds raised to reduce debt," said Grady Wulff, a senior market analyst at Bell Direct.

TPG Telecom on Tuesday forecast fiscal year 2025 operating earnings between A$1.61 billion and A$1.66 billion, excluding contribution from the assets sold to Vocus, and guided to a fiscal 2025 dividend of 18 Australian cents apiece, same as last year.

Shares of the firm surged to a near three-year high of A$5.750 a share in early trade, but pared gains and fell more than 3% by noon.

The stock was last trading slightly below Monday's close at around A$5.50 apiece.

($1 = 1.5451 Australian dollars)

(Reporting by Rishav Chatterjee, Rajasik Mukherjee, and Sameer Manekar in Bengaluru; Editing by Mohammed Safi Shamsi, Rashmi Aich and Mrigank Dhaniwala)

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