Paul Phelan/CAIRNS

AUSTRALIA'S long-running airline-privatisation programme has come to an end with the flotation of the remaining 75% state holding in Qantas Airways.

Despite early doubts over demand for the shares, the Australian Government estimates that it will receive around A$1.45 billion ($1 billion) from the flotation, clearing the minimum target price by around $100 million.

Australian institutions were initially unenthusiastic about the flotation, but bidding picked up after foreign-investor demand.

British Airways already holds 25% of the airline, which it acquired, in the first phase of privatisation, at the end of 1992. The 20% allotted to foreign institutions, in the latest privatisation, were designed to bring the offshore holding to 45%.

After early heavy trading in the shares, however, there is evidence that foreign ownership has since reached, or even exceeded, the maximum 49% limit. Qantas chairman Gary Pemberton says that the exact figure will not become clear until mid-August and that action would then be taken if the limit has been breached. Voting rights could be removed or disposals forced.

Although the flotation price beat early expectations, UK observers have been quick to point out that the sale would value BA's stake in the airline at around A$450 million, against the A$660 million it paid originally.

Writing in an Australian newspaper, however, former Qantas chairman Jim Leslie has attacked BA's boardroom control of the airline, claiming that it "...rides roughshod over other shareholders' rights".

BA will be allocated only three seats on the ten-person Qantas board, but Leslie adds that the airline also has a right of veto over the appointment of a chairman. This is potentially significant, because only four directors are required to veto major board decisions.

Source: Flight International