Queensland Rail share sale raises A$4.63

Sydney: Queensland state sold shares of Australian coal-train operator QR National Ltd. at A$2.55 each (Dh9.24), raising A$4.63 billion for the state in the nation's second-biggest ever initial public offering.

The state government will keep a stake of as much as 40 per cent in the company, it said in an e-mailed statement on Saturday. The per-share price gives QR National an enterprise value of A$6.7 billion, the state said. The shares start trading today.

Queensland is targeting A$15 billion from asset sales to replace lost revenue and regain its AAA credit rating. QR National will test the appetite for new listings after Valemus scrapped a A$1.39 billion offer in July and shares of Myer Holdings, which raised A$2.1 billion in 2009, trade below the offer price.

"These proceeds will now be used to pay off debt and establish a stronger balance sheet," Premier Anna Bligh said in the statement. "Now is the right time for QR National to be backed by private investment." Queensland's income from the transaction comprises A$4.05 billion in IPO proceeds, an A$80 million dividend from QR National and A$500 million from a debt facility arranged by the rail operator, Treasurer Andrew Fraser said on Saturday.

Retail investors bought 34 per cent of the shares and institutional investors 66 per cent. Retail investors will receive a 10 cent discount, meaning they pay A$2.45 a share.

The A$2.55 price is near the bottom of an indicated range, with the state government saying October 11 it would sell the shares at between A$2.50 and A$3 apiece. The share sale had been subjected to negative "campaigns" from fund managers, coal companies and rival Asciano Group, Fraser said.

Interests

"There has been a relentless campaign here by many people who've got vested interests to talk this price down," he said. Still, "what you've got is a transaction that's been completed just as we said it would."

QR National will have an A$6.22 billion market value at listing, according to the statement. Stock exchange operator ASX is valued at A$6.57 billion, while Qantas Airways is worth A$6.03 billion, according to Bloomberg data. The Australian government sold one third of Telstra for A$14.3 billion in 1997, in the nation's biggest public share sale.

Brisbane-based QR National operates 700 locomotives, 16,000 freight cars and 2,300 kilometres of track across Australia.