Monday 25 October 2010

10 winners and losers from the Queensland Rail sale

According to the Courier Mail...

The Winners are...
  • The Queensland Budget. The sale could pump $7 billion dollars into the State's coffers, and return Queensland's Triple A credit rating. It also takes future capital expenditure off the books.

  • Queensland mum and dad investors. Queensland retail investors will get priority if the IPO is over-subscribed and will also get a slightly bigger loyalty bonus of one for 15, capped at 675 new shares. They will also get a 10c discount on the price to be paid by institutions.

  • QR National executives. According to the prospectus, the remuneration pool for QR National's seven non-executive directors at $2.5 million, which is an increase of $461,000. Chief executive Lance Hockridge will receive a base pay of $1.7 million which is double his current salary.

  • Lawyers, stockbrokers, accountants and the media. There is plenty of work and money sloshing around as a result of the sale. Credit Suisse, Goldman Sachs, Merrill Lynch, RBS and UBS - will each get a management fee of $3 million and 0.8 per cent of whatever is raised from the float. QR's legal adviser, Allens Arthur Robinson, get $4.8 million and KPMG Transaction Services $5.3 million. The Government is spending $15 million advertising the IPO.

  • QR National staff will receive $1000 worth of shares. Their latest workplace agreement also provides for a payment of $4000 to each employee in lieu of the previous offer of $4000 of shares at a discounted rate.

And the LOSERS are....
  • The ALP. The popularity of premier Anna Bligh and her Labor government has plummeted and privatisation is one of the reasons. A Newspoll last month put Labor's primary vote at 29 percent, down from 42 percent the party recorded at last year's election.

  • QR National staff. Job loses are inevitable with an estimated 850 jobs from the 9400-strong workforce likely to go. Investment bank Merrill Lynch suggests savings of $110 million could be made be a staff downsizing

  • Country towns. Job losses plus the closure of non-profitable or marginal operations as part of streamlining the business will hit hurt some country towns.

  • Queensland tax payers. QR National was a state-owned enterprise that paid $298 million into the State’s bank account last financial year. That money will have to come from somewhere else now.

  • The Australian economy. International institutions will buy shares which means wealth created in Australia will be moved to other countries.
Another 21 losers at the next election will be the Labor MPs for... Chatsworth, Everton, Broadwater; Cook, Barron River, Toowoomba North, Whitsunday, Southport, Mount Ommaney, Townsville, Springwood, Cairns, Mansfield, Ferny Grove, Pine Rivers, Kallangur, Mount Isa, Burleigh, Pumicestone, Mount Coot-tha, Redcliffe.

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