State sells down stake in Aurizon
The state is selling 200 million shares at $4.03 each. The stock closed at $4.04 on Friday.
Its holding in Aurizon, Australia's biggest transporter of coal by rail, will fall to 8.9 per cent, from 18.2 per cent, when the sale is completed, Mr Nicholls said.
The Queensland government sold off most of the company in 2010 in what was the second-largest float in Australia's history.
Queensland, Australia's most indebted state, is aiming to return its budget to surplus in 2014-15 as Premier Campbell Newman attempts to win back its AAA credit rating.
Aurizon shares have climbed by 58 per cent from their November 2010 listing, compared with an 11 per cent increase by the S&P/ASX 200 Index.
"Now is not a bad time to be raising funds with confidence coming back [and] markets having rallied," said Nader Naeimi, the head of dynamic asset allocation at AMP Capital Investors. "There might not be a better time to do it."
Mr Nicholls said the deal would provide more funds to pay down debt. "While the government will continue to review its residual 8.9 per cent holding in Aurizon, we have no current intention to sell additional shares in the near term," he said.
Frequently Asked Questions about this Article…
Queensland is selling half of its stake in Aurizon Holdings — 200 million shares — to raise about $806 million. Treasurer Tim Nicholls says the proceeds will be used to pay down state debt as part of a plan to repair the budget.
The state is offering 200 million Aurizon shares at $4.03 each. The article notes the stock closed at $4.04 on the Friday before the sale announcement.
After the sale is completed, Queensland’s holding in Aurizon will fall to 8.9% from 18.2%.
The sale is expected to raise about $806 million. Treasurer Tim Nicholls said the funds will be used to pay down debt as part of efforts to improve the state’s fiscal position.
Aurizon shares have climbed about 58% since their November 2010 listing. By comparison, the S&P/ASX 200 Index rose roughly 11% over the same period, according to the article.
Treasurer Tim Nicholls said the government will continue to review its remaining 8.9% holding but has no current intention to sell additional shares in the near term.
Queensland, described in the article as Australia's most indebted state, is aiming to return its budget to surplus in 2014–15 and wants to regain a AAA credit rating. Selling part of the Aurizon stake is one step to reduce debt and improve the budget position.
Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors, commented that now is a reasonable time to raise funds because confidence is returning and markets have rallied — implying the timing could be favorable for the government’s sale.
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