Queensland Rail in $7bn mega-float

THE Queensland Government will offload some of its rail assets in potentially the biggest float in Australian history.

The estimated $7 billion float will go ahead in the second half of 2010 with priority given to Queensland residents.

QR coal and freight workers will get $1000 worth of shares and will have the option of buying an additional $4000 of shares at a discounted price.

The workers' jobs have also been guaranteed for two years under the new entity.

Queensland Premier Anna Bligh said the government would restructure the state's rail system to create two new entities: a publicly listed company to be known as QR National and a government-owned corporation to be known as QR.

QR National will have a 99-year lease over the state's coal and general freight networks.

The government will initially retain 25 to 40 per cent of the new company, with the intention of gradually selling down its shareholding.

The coal industry yesterday slammed the overhaul as a short-term bid to raise revenue that will instead lead to reduced competition and increased cost to taxpayers.

The broking community was salivating at the prospect of the massive float.

"There is no question that there is enormous support for good quality assets in this market and QR is certainly a national business. It will be a top 50 company in Australia," Tim Crommelin, executive chairman of RBS Morgans, said.

"If you look at below and above rail assets, it is an integrated business and I think there will be enormous support from the investing public and I think the government should be congratulated for a very innovative and sensible approach for the public to own a terrific asset," he said.

Stockbroker Stuart Smith, adviser at Bell Potter in Brisbane, believes the QR float will spark a new rally on the wider ASX.

"The phones will be running red hot and this will be a fillip to the broader market, you watch," he said.


Source: news.com.au