DataRoom AM: Qantas carry-on

The government looks poised for a Qantas debt guarantee, while bankers clamour to advise on Medibank’s sale.

Qantas Airways’ government aid push could come to a head at the end of the month when it releases a strategic review update and its half-year results. The government is expected to play ball.

Elsewhere, investment banks prepare pitches for the highly sought after advisory roles on Medibank Private, a British group buys famous Australian chocolate name Ernest Hillier, BlueScope Steel makes yet another acquisition and UGL confirms private equity interest in its property arm.

The federal government is resigned to the fact it will need to offer a guarantee of Qantas Airways’ debt to ensure the national carrier survives, according to The Australian Financial Review.

The deal is a crucial one for Qantas as it looks to shore up its financial position. It is also mulling various asset sales including divestments of terminals, a partial sale of Jetstar, an auction of its freight division and a partial sale or float of its frequent flyer division. On the latter, rumoured suitor Woolworths has reportedly ruled itself out of the running should a trade sale be pursued.

Investment bankers are preparing to pitch for the coveted lead advisory roles on the government’s planned $4 billion privatisation of Medibank Private, with the Coalition to call upon proposals in two to three weeks’ time, according to the AFR. Despite fees being smaller than private sector advisory roles, investment banks clamour for such opportunities as they are high profile and offer an audience with key policymakers.

UGL has confirmed private equity interest in its $1 billion DTZ property arm. The ASX-listed group, which was deserted by investors yesterday, made the decision to pursue a demerger last year but is considering changing tact after receiving unsolicited buyout offers. For now, however, it continues to lean to a demerger. Warburg Pincus and TPG Capital have both been linked to bids for DTZ in recent months.

Household Melbourne chocolate name Ernest Hillier has been snapped up by British turnaround specialist Hilco Capital. The $11 million deal was sealed by Hilco’s Australian subsidiary Re:Capital and represents the firm’s second local investment after Northstate Carpets in Queensland. The deal gifts it control of the Hillier’s and Newman’s brands.

Bidders for the $700 million-plus Port of Newcastle are racing to shore up finance after recently lodging indicative bids for the New South Wales government-owned asset, according to the AFR. The parties in the hunt reportedly include ATEC Rail Group, Macquarie Infrastructure and Real Assets, Hastings Funds Management, Deutsche Asset & Wealth Management and Cheung Kong Infrastructure Holdings.

BlueScope Steel has agreed to pay $NZ120 million ($114 million) to acquire Pacific Steel Group from Fletcher Building. The deal is the latest in an acquisitive spree by BlueScope and is due to be finalised by June 30. Meanwhile, a decision from the competition regulator on BlueScope’s proposed purchase of the OneSteel Sheet & Coil business from Arrium has been pushed back to March 6.

Finally, Kimberley Diamonds has agreed to buy the Argyle Smoke Creek alluvial diamond project in Western Australia from fellow ASX-listed miner Venus Metals for $1 million.

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