Australian miners bid A$4.85-billion to prevent Queensland Rail IPO
26 May 2010
A consortium of 13 coal companies in Australia have made a joint A$4.85 billion ($4 billion) cash bid for Queensland Rail's coal rail track network owned by the state government to try and prevent the state from making a A$3 billion IPO this year.
The consortium of 13 coal companies that are part of the Queensland Coal Industry Rail Group (QCIRG) with heavyweight miners like BHP Billiton, Rio Tinto, Xstrata, Peabody Energy, Anglo American, Felix Resources, Macarthur Coal and others, said yesterday that they are ready to acquire the rail network if the Queensland state is willing to shelve its plan of making an initial public offering for the track network and the coal haulage business, including trains and wagons.
Coal miners are worried that the by privatising the rail network, the new owner could exert too much power over the coal industry.
"We have considered the alternative model under the IPO ... and strongly believe it does not represent an optimal or even reasonable basis for assuring the future of the state's major export industry," said Nick Greiner, chairman of QCIRG in a statement
"Importantly, our offer is able to be settled with the government prior to the IPO and will not be dependent on volatile equity markets, removing major risk for the state while also providing early settlement," he added.
The Queensland state government said that they would consider the bid, but have said that that they will press on with the IPO scheduled for October or November regardless of the size of the offer.
But according to analysts, the nearly $2 billion extra being offer over the IPO price will put pressure on the state to rethink and shelve its plan for an IPO.
The coal miners have also said that they are willing to spend $2.05 billion to expand the railroad in order to meet the increasing demand from Asia.
