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The Queensland government will sell a $1.5 billion stake in QR National, with the rail-freight company planning to buy back two-thirds of the shares.
The government said the deal involved the sale of $1 billion of shares via a selective buyback to QR National and a $500 million placement to a small number of cornerstone investors.
QR National has offered to buy back the $1 billion share package back for $3.47 a share, in line with its closing price last Friday.
The news sent QR National shares up 5.2 per cent to $3.65 in early trade, as the company's shares had been under pressure not only from a weak outlook for the coal market but also on anticipation of a big selldown by the state.
The sell-off will reduce the government’s stake in QR National from 33.9 per cent, to 16 per cent.
QR National had already announced a buyback of up to 10 per cent of its shares in August, and has so far bought $50 million worth of shares.
It said the buyback of the state's shares would replace the on-market buyback, if approved by shareholders in November.
Today's sale would reap a $400 million gain for the state, which privatised QR National two years ago at $2.55 a share.
State treasurer Tim Nicholls said it was a great outcome for Queenslanders, as the price the government achieves for the sale will see more funds available to pay down Labor’s legacy of debt.
‘‘The LNP (Liberal National Party) opposed the former Labor government’s decision to sell QR National. However, we now have an obligation to Queenslanders to achieve the best possible outcome from the situation we inherited,’’ Mr Nicholls said in a statement this morning.
‘‘The deal announced today does just that.’’
Mr Nicholls said the $1.5 billion sale represented a gain of around $400 million to Queensland’s bottom line since the initial public offer.
‘‘We have been able to secure the best deal for Queenslanders in terms of the total sale figure and minimising the fees incurred,’’ he said.
Mr Nicholls said the government continued to be a significant shareholder in QR National.He said the government would ‘‘continue to review its investment in QR National’’ but added: ‘‘We have no current intention to sell any of our remaining shares in the near term’’.
This article first appeared on www.smh.com.au
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