Sydney, 8 October (Argus) — The Queensland state government plans to sell over half of its 33.9pc stake in Australia's largest coal rail freight company QR National for A$1.5bn ($1.53bn).
Queensland will reduce its stake in QR National to 16pc and use the proceeds of the sale to pay down debt. The state does not plan to be a long-term holder of the 16pc stake, state treasurer Tim Nicholls said, but he did not reveal when the remaining shares would be sold.
QR National was privatised in November 2010 by the state's previous Labor government. The rail firm has appeared less close to the current Liberal administration than the previous regime, but has been granted the right to build a railway from the new Galilee coal basin to its existing Bowen basin network ahead of some other proponents. The part-sale of the government's stake may mean QR National has less power to lobby for similar rights in the future.
Queensland will sell A$1bn of shares to QR National at A$3.47/share, subject to shareholder approval at a meeting on 21 November. Institutional investors will pay A$500mn for the other government shares on sale by 11 October.
QR National shares were originally issued to institutional shareholders at A$2.55 and to retail investors at A$2.45 as the Queensland state government sold two-thirds of the company in an effort to lower debt. The Queensland government raised A$4.6bn from that sale, making it Australia's second largest initial public offering.
QR National Coal expects to haul 195mn-205mn t of thermal and coking coal in the 2012-13 fiscal year ending 30 June next year. It hauled 186mn t in 2011-12, unchanged compared to the previous year because of a slow recovery from the Queensland floods in 2010-11, industrial action at coking coal mines in the Bowen basin operated by BHP Mitsubishi Alliance and lower than expected customer demand for coal. QR National, which has most of its coal haulage operations in Queensland, said coal haulage volumes in New South Wales' Hunter Valley rose by 15pc to 33.9mn t in the latest fiscal year compared with 29.6mn t in the previous year.
But QR National posted a 22pc rise in profit to A$440.9mn for 2011-12 despite the reduced haulage volumes, as revenue rose by 10pc to A$3.5bn. The firm operates about 2,300km of rail track.
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