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THE Newman government yesterday sold just over half its holding in QR National for a share price 35 per cent more than its Labor predecessor secured when it privatised the company two years ago.
The Liberal National Party opposed the privatisation but at the weekend it did a deal that will deliver it $1.5 billion to sell down its share from 33 per cent to 16 per cent. Under the terms of the privatisation, the government stake in QR National was unable to be sold until its results were announced to the stock exchange in late August. Since then the company's share price has been about $3.40-$3.60, well up from the $2.55 when it was privatised in November 2010.
Yesterday's sale forced the share price up a further 5.2 per cent to $3.65, which pushed the value of the company up by $400 million, meaning that the remaining government shares rose by about $68m.
Treasurer Tim Nicholls said while the LNP had opposed the privatisation, now that it was in government it was obliged to make the best of the situation, and the $1.5bn would go towards paying down state debt.
Despite the benefit to the government from the sale, he denied the privatisation had been good for Queensland. "A lot of people think it was not good for Queensland. It led to a lack of faith in the political process and it caused a lot of divisions in the community," he said.
Labor, which cited the privatisation of QR National as a reason it lost the March election, yesterday opposed the sell-down, saying it would erode the state's net debt position. "The Labor Party knows from bitter experience that Queenslanders do not like the sale of public assets. Selling public holdings in QR National is not what Queenslanders will want," said Treasury spokesman Curtis Pitt.
"There are sound reasons for holding on to the public's stake, including the opportunity to use dividends to fund future infrastructure and generate jobs."
This article first appeared on www.theaustralian.com.au
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