July 6 (Reuters) – The Queensland state government vowed on Tuesday to press ahead with the float of its QR National coal transport business despite the postponement of another major Australian IPO and increasingly volatile equity markets.
Germany’s Bilfinger Berger (GBFG.DE) earlier announced it would delay the planned $1.1 billion float of its Australian unit Valemus until early next year due to weak markets. [ID:nLDE6641DX]
“The government notes the decision by Valemus’ parent company. It doesn’t have any direct bearing on our plans to float QR National,” Queensland treasurer Andrew Fraser said in a statement emailed to Reuters.
Queensland state plans an initial public offering of the A$7 billion ($5.88 billion) QR National in the fourth quarter of this year. It would be Australia’s largest float since telecoms company Telstra (TLS.AX) was privatised in states in the 1990s.
The Valemus float, scheduled for this month, was seen by many in the market as testing the appetite for a multi-billion dollar pipeline of IPOs which bankers say have been put on hold due to choppy markets.
“There’s plenty of attractively priced companies out there, so we don’t need to pay a premium for new ones. Therefore vendors have to reset expectations, or are resetting expectations,” said John Grace, portfolio manager at Ausbil Dexia.
The Queensland government pointed out QR National’s leverage to the mining sector and growing demand from Asia for Australian resources differentiated it from Valemus. Fraser said the government had received “significant interest” in the business from potential investors in recent months.
A source close to the transaction said the float timetable had not changed. The offer documents for the IPO were due to go out to investors in August or September.
A group of 13 coal miners, led by BHP Billiton (BHP.AX), Rio Tinto (RIO.AX) and Xstrata (XTA.L), have sought to derail the IPO plans by making their own A$4.85 billion cash bid for the rail-track network in the country’s biggest coal state.
They argue that a vertically-integrated model where the company owned both the haulage service and the tracks could hurt coal transport efficiency and competition. (Reporting by Michael Smith and Sonali Paul; Editing by Narayanan Somasundaram and Ed Davies)