Track clear for $5bn Queensland Rail float
QUEENSLAND Treasurer Andrew Fraser yesterday gave the green light to the $5 billion-plus QR National float.
QUEENSLAND Treasurer Andrew Fraser yesterday gave the green light to the $5 billion-plus QR National float.
This will be Australia's biggest initial public offering since the final Telstra T3 selldown by the federal government in 2006.
The prospectus will be released on October 10 with QR expected to become a top 50 company listed on the ASX in the last week of November at the latest.
Mr Fraser yesterday launched the pre-registration process for retail investors, whereby they can apply via a website for a guaranteed allocation of shares. He did not indicate how big the allocation would be, pointing to the planned official release next month.
The prospectus, which is in preparation and will be subject to a $15 million publicity campaign in the lead-up to the November float, will offer retail investors stock at a discount to the price being paid by institutional investors. There will also be a "loyalty bonus" for shareholders retaining stock for a specified period but, again, those details are yet to be made public.
Speaking at the launch yesterday, Mr Fraser and QR chief executive Lance Hockridge were careful not to make any forward-looking statements given that the prospectus has yet to be registered with regulator ASIC.
Calling the offer "a rare, if not unique opportunity" to share in the fortunes of the world's biggest hauler of coal, Mr Fraser highlighted the fact that "two-thirds of seaborne metallurgical coal in the world originates in Queensland".
While there are clearly global carbon pricing troubles ahead for steaming coal, used in power stations, the coking coal used in steelmaking is expected to remain largely irreplaceable as a blast furnace feed for many years to come.
Mr Fraser said that "all the indications from the work we've done" suggested strong demand for stock, from which his government would keep a stake of between 25 and 40 per cent. Earlier this year the rail system's passenger business was carved out of QR to remain in government hands, leaving a freight hauling business which, although based in Queensland, also has significant "above rail" operations in NSW, South Australia and Western Australia.
"This is about the opportunity to expand the export capability of this state," Mr Fraser said, adding that the issue was "very definitely targeted at retail investors across Australia, not just Queensland".
The specific benefit for Queensland residents is that they will be given priority for stock in the event of oversubscription.
Two weeks ago a syndicate of 10 major coalmining companies chaired by former NSW premier Nick Greiner pulled out of converting a much touted $5bn indicative bid for the major coal haulage lines into a formal bid, partly because the Queensland government insisted on an unconditional bid and the miners faced potential competition hurdles.
Their exit reduced price tension for the government but greatly simplified the politics of how to arrange the sale: either a public float or no sale at all.
People close to the float believe the state government will reduce its holding to around 25 per cent and that the balance being sold will fetch around $5bn in this cautious sharemarket. The float itself is expected to raise closer to $4bn in direct equity, with the balance being sought as debt.
The enterprise value of the business including debt is equal to $7bn. It will be sold as a growth rather than a high-yield stock.
