DataRoom AM: Qantas cast-off

Abbott goes cold on guaranteeing Qantas debt, while Oil Search offloads shares to the PNG government.

The big day for Qantas Airways came and went, largely with few surprises. Terminal leases and aircraft will be sold, while there’s no information on a float of the frequent flyer division -- and that should come as welcome news.

Elsewhere, Oil Search wraps up a big deal in Papua New Guinea, Freelancer teases on a new share offering, Paul Ramsay divests his sizeable Prime Media stake and the IPO market receives mixed news.

Troubled national carrier Qantas Airways yesterday confirmed it would sell its Brisbane Airport terminal lease -- which is due to expire at the end of 2018 -- to the Brisbane Airport Corporation for $112 million. The airline is in negotiations over a similar deal at Melbourne Airport and is likely to push for a sale of its Sydney Airport lease as well. Qantas boss Alan Joyce also advised that more than 50 planes would be deferred or sold as part of a $2 billion cost savings drive.

The company was, however, quiet on the prospect of a partial float of its frequent flyer division. It appears this will be a measure of last resort, with a record result for the division likely seeing its value rise above $3.5bn, well above Qantas’ market cap of $2.7bn.

Meanwhile, Tony Abbott has indicated a government guarantee of Qantas debt is not as assured as Joe Hockey suggested just a fortnight ago.

Oil Search has agreed to offload a 10 per cent stake in its business to the Papua New Guinea government in order to fund its purchase of a 22.8 per cent stake in the Elk and Antelope gas fields in PNG. The stake in the fields cost just shy of $1bn, with the company to raise $1.22bn through the share sale. The government deal is a complicated one however, with PNG borrowing money from UBS and the shares to serve as collateral for the loan. UBS will then hedge through the sale of 82 million shares to clients. boss Matt Barrie has indicated that more stock in the company will become available over time. The company listed 11 per cent of its stock through the hottest IPO of last year and Barrie says as much as 30 per cent will be on the market in the future -- but not for at least another 12 months.

Childcare centre operator Sterling Early Education is progressing plans to list on the ASX. The company’s IPO will be priced in early March, with a valuation of about $250m tipped when it lists in April. Macquarie Capital is serving as lead advisor.

Also pressing the go button is online retailer OzSale, which will make its ASX debut in May with a valuation of $500m, according to The Australian Financial Review.

In other IPO news, EnergyAustralia’s Hong Kong owner CLP Group appears very unlikely to pursue a float of Australia’s third largest energy retailer. After being delayed in 2012 and 2013, the plans now appear set to gather dust for a significant period, with no mention made of an IPO upon the release of weak 2013 earnings.

Billionaire Paul Ramsay has decided to exit his 30 per cent stake in Prime Media through a block trade worth $95.7m. The move appears a little odd given Prime is seen to be ripe for a takeover offer when media reach rules change, potentially this year.

Finally, Melbourne IT shares have surged 9 per cent after the company bought local rival Netregistry for $50.4m in a cash and scrip deal.

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