Australia's biggest coal state, Queensland, plans to launch an initial public offer of shares in its coal-freight business on October 10, defying opposition from major miners to one of the country's biggest IPOs in a decade.
The Queensland government, which is selling off between 60 and 75 percent of its QR National business to shore up its budget, announced the date for the IPO prospectus on Sunday as it kicked off a pre-marketing campaign for retail investors.
"We expect very strong demand," Queensland treasurer Andrew Fraser told reporters. He declined to give any key financial data for the IPO, saying these would be contained in the prospectus.
The coal haulage tracks and trains business is valued at A$7 billion ($6.6 billion). The IPO could be the largest on the Australian market since telecoms company Telstra was privatised in three tranches.
Coal miners such as BHP Billiton, Rio Tinto and Xstrata had opposed the IPO, saying the newly privatised business would have too much control over their industry.
Fraser said that the state government would retain between 25 and 40 percent of QR National, but would look to divest its remaining holding in the future. "We are looking to place obviously at least 60 percent in this transaction and we will sell down into the future," Fraser told the Australian Broadcasting Corporation in an interview broadcast Sunday.
A maximum 15 percent holding for "any entity acting alone or in concert" had been enacted by law, he said, to protect QR National from potential take-over threats.
Earlier this month a consortium of major coal miners dropped a $4.7 billion bid for the coal rail network. An institutional roadshow will follow the prospectus launch with a likely float date towards the end of the year.