Warning!
QR National Initial Public Offering
Warning!
It’s on TV, it’s in the papers and soon to be in our letter boxes…
It’s the big state sell off and you can be a part of it! Give your hard earned cash to the Queensland State government (for something you already own) and in return they will give you a share of … ‘soon to be nothing’!
You only have to cast your mind back a few years and look at the big sell off of Telstra and the huge promises of fantastic returns BUT what they forgot to tell you was that the same staff, same management and same organisational structure would remain. We all know the end result, a share collapse as Telstra was unable to compete in the open market place once its legislated monopoly was removed. What makes you think QR National will be any different?
Six years ago the Queensland government chopped up the then Queensland Rail into two halves, and today they are ready to sell off the ‘prized pig’ in the hope that the 7 billion or so dollars will plug the hole in the state finances (courtesy of the Global Financial Crises).
The state will keep the passenger service (because no private enterprise would be stupid enough to buy a ticking time bomb) and the mines will take the long haul and bulk services with a 99 year lease on the tracks and infrastructure.
But here’s the thing. The new owners are going to want to make a profit AND make repayments on the loan required to purchase the asset. This is going to take some doing! The staff however have absolutely no interest in being more efficient and hence profitable and why should they, they don’t own QR National – or do they. All present staff have been given $1000 worth of shares in the new company AND a the option to buy another $4000 worth of shares at a reduced price. BIG incentive to get them to become involved in the company and to work harder… question is, will it be enough?
Only time will tell or more specifically, two years time will tell. All present staff have been assured that their positions with QR National are safe for the next two years BUT after that the gloves come off. If you’re a slacker, you’re out (unless the Unions step in… which they certainly will).
End result is, QR National will be spending the next two years in limbo – with no one working any harder than at present – with the company haemorrhaging cash. After that they’ll be focusing inwards on their worker/Union problems and not on growing the company. There will undoubtedly have be another public share offering to raise more cash with the inevitable dilution of share value. The prognosis is not good, stay away from QR National.
You have been warned.
Tags: government, IPO, railways