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BA Could Sell 25% Of QF  
User currently offlineSingapore_Air From United Kingdom, joined Nov 2000, 13738 posts, RR: 19
Posted (12 years 9 months 1 week 6 days 8 hours ago) and read 897 times:

Troubled BA might sell stake in Qantas

By Mark Todd

Qantas and its major shareholder British Airways may be preparing to sever ties, as speculation last night mounted that the UK carrier was looking to sell its $1 billion stake in Qantas to ease the pressure on its strained finances.

Qantas shares fell 13c to $3.24 yesterday on the speculation, which variously had Credit Suisse First Boston and Macquarie Equities selling BA's stake at prices between $2.60 and $3 a share.

Almost 21.5 million Qantas shares were traded.

Qantas public affairs manager Mr Michael Sharp would only offer the standard line that "we don't comment on market rumours".

The speculation, which has cropped up consistently during BA's eight-year relationship with Qantas, coincided with the Australian carrier's board meeting ahead of the company's annual meeting in Melbourne today.

Analysts suggested BA would resist selling the 25 per cent holding in Qantas unless it desperately needed the funds to ensure its future. BA, along with many other airlines, has had to sack thousands of workers to remain viable after a severe slump in demand for air travel following terrorist attacks in the US. Some carriers, Swissair among them, have collapsed.

In the week following the September 11 attacks, volumes on BA's US routes fell 60 per cent and it lost $140 million of revenue and $120 million of profit. Analysts have forecast the airline's losses for 2001/02 could spiral to as much as
$1 billion.

"Strategically it would be a ridiculous move for them to sell," said one analyst who declined to be named. "But it may get to the stage where they don't have a choice."

It is estimated that BA could first sell property and unencumbered planes worth almost $3 billion.

At today's prices, BA is facing a 13 per cent loss on the Qantas investment, which many consider to be the best exposure to the troubled aviation industry. Some merchant banks have a 12-month price target for Qantas of more than $5 a share.

Qantas's market capitalisation of $4.3 billion is now rapidly approaching that of BA at $4.85 billion.

It is believed, however, that BA is more interested in concentrating on European and US routes, and would have the support of Qantas senior executives if it decided to quit its stake.

A substantial concern for BA, though, is the prospect of the stake falling into the hands of a rival, which might create a major power that could force BA from Southern Hemisphere markets.

BA beat Singapore Airlines to the cornerstone interest ahead of Qantas's sharemarket float in 1995. It is thought the Flying Kangaroo harbours a desire to somehow forge a dominant regional operator through an alliance with the Asian carrier



Anyone can fly, only the best Soar.
3 replies: All unread, jump to last
 
User currently offlineMas777 From United Kingdom, joined Jul 1999, 2935 posts, RR: 6
Reply 1, posted (12 years 9 months 1 week 6 days 4 hours ago) and read 866 times:

All very convenient for BA then - especially now BA and QF have managed to take a large chunk of the Kangaroo route. They have also had time to get QF well established into OneWorld - so although on paper, BA may sell its stake (if at all true) they will still in effect operate in much the same manner.

Call my a cynic but something smells fishy here.


User currently offlineQantasAirways From Australia, joined Mar 2001, 1277 posts, RR: 3
Reply 2, posted (12 years 9 months 1 week 6 days 4 hours ago) and read 863 times:

If it were to be sold, who would it be sold to?

Yes, I agree... QF is very much into OneWorld now, and while BA might sell the stake, I don't think that partnership will fail.

Interesting...
Regards
QantasAirways



Spirit of Australia
User currently offlineRed Panda From Hong Kong, joined Jun 2000, 1521 posts, RR: 0
Reply 3, posted (12 years 9 months 1 week 6 days 4 hours ago) and read 860 times:

Looks to me that BA need some quick cash to meet its short-term obligations.

r panda


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