By Paul Hemsley
Queensland Treasurer Tim Nicholls has announced the government will try to offload shares in its freight rail company QR National it says are worth around $1.5 billion.
The government says the big sell-off is necessary to raise money that can contribute to paying down the previous Labor government’s debt.
Originally, the Liberal National Party opposed the former Labor government’s decision to sell QR National, but now says it has been forced into the position of having to tackle with state debt levels of more than $90 billion.
The government says it will sell $1 billion worth of shares through a selective buyback to QR National as well as a $500 million placement to a ‘small number of cornerstone investors’.
Mr Nicholls is adamant that taxpayers are getting a good price for the large share sell-off despite the fact that the government hase conceded it is under pressure to reduce its debt.
“Importantly the $3.47 price per share represents a premium to QR National’s 3, 5, 10, 30, 60 and 90 day volume weighted average price of shares (VWAP), traded on the Australian Securities Exchange and equivalent to the last sale price,” Mr Nicholls said in a statement.
The government’s holding in QR National will reduce from 33.9 per cent to 16 per cent, or 821.5 million shares to 389.2 million shares on completion of the selective buyback and cornerstone placement.
Proceeds from the selective buyback are subject to shareholder approval.
As a result of the sale, the government’s remaining stake in QR National now valued at $1.35 billion.
Mr Nicholls claimed the sale was the best deal for Queenslanders because of the total sale figure and minimizing the fees incurred.
The Newman Government continues to be a significant shareholder in QR National, Mr Nicholls said
“We now have an obligation to Queenslanders to achieve the best possible outcome from the situation we inherited,” he said.
According to Mr Nicholls, Queensland’s bottom line has gained around $400 million since the Initial Public Offer.
Mr Nicholls said the government has no intention to sell any of its remaining shares in the near term but will continue to review its investment in QR National.
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