Queensland raises $4.57 bn in QR IPO

Queensland state sold shares of Australian coal-train operator QR National Ltd. at A$2.55 each, raising A$4.63 billion ($4.57 billion) for the state in the nation’s second-biggest ever initial public offering.

The state government will keep a stake of as much as 40 percent in the company, it said in an e-mailed statement today. The per-share price gives QR National an enterprise value of A$6.7 billion, the state said. The shares start trading November 22.

Queensland is targeting A$15 billion from asset sales to replace lost revenue and regain its AAA credit rating. QR National will test the appetite for new listings after Valemus Ltd. scrapped a A$1.39 billion offer in July and shares of Myer Holdings Ltd., which raised A$2.1 billion in 2009, trade below the offer price.

“These proceeds will now be used to pay off debt and establish a stronger balance sheet,” Premier Anna Bligh said in the statement. “Now is the right time for QR National to be backed by private investment.”

Queensland’s income from the transaction comprises A$4.05 billion in IPO proceeds, an A$80 million dividend from QR National and A$500 million from a debt facility arranged by the rail operator, Treasurer Andrew Fraser said today.

Retail investors bought 34 percent of the shares and institutional investors 66 percent. Retail investors will receive a 10 cent discount, meaning they pay A$2.45 a share.

The A$2.55 price is near the bottom of an indicated range, with the state government saying Oct. 11 it would sell the shares at between A$2.50 and A$3 apiece. The share sale had been subjected to negative “campaigns” from fund managers, coal companies and rival Asciano Group, Fraser said.