After being one of the hardest hit stocks by the pandemic, Qantas Group (ASX: QAN) finally has some light at the end of the tunnel where they will emerge from financial ruin in a handier position following the sale of surplus land rights in the heart of Sydney for $802 million.
The land is located in Mascot, the same suburb as Sydney Airport, and covers 13.8 hectares. International property development company LOGOS was ultimately the successful bidder after expressions of interest were sought three months ago for the underdeveloped land that attracted 18 offers in total.
“We went into this process open-minded about whether we’d sell some, all, or none of this land depending on the response from the market. That response was extremely strong and it has resulted in the sale of all the land,” said Qantas CEO, Alan Joyce.
“We’ll use these funds to help pay down debt that we’ve built up during the pandemic. The strength of this sale and its impact on our balance sheet means we can get back to investing in core parts of our business sooner.
“The extended lockdowns and border closures of the past few months have been extremely tough, but this transaction adds to the growing momentum around our recovery.
“The restart date for international travel has been brought forward and the thresholds for domestic borders opening in most states should be reached in the next two months. We know there is a lot of pent-up demand that we’re ready to capitalise on, with some strong signs already.”
Settlement of the land is expected to take place before the end of CY2021 which will strengthen Qantas’ balance sheet in the lead up to international travel resuming.
Discussions have also already commenced with LEGOS about the creation of a dedicated precinct for Qantas on the land, as well as the potential sale of 3 adjoining hectares to the land which the national carrier has retained.
While the sold block of 13.8 hectares was classified as “surplus” land by Qantas, they will lease back potions of it until arrangements are made to relocate some of the functions it is used for.
The influx of cash will assist Qantas in the re-launching of its fleet which was largely put in hibernation since international borders were raised. This resulted in a $1.96 billion net loss after tax in FY20 which improved marginally to a net loss of $1.72 billion for FY21.
While it take years for Qantas to recover from these losses, the Company is so confident that international travel will return to pre-pandemic levels in the near future that they have flagged the return of their entire workforce by June 2022.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
Latest posts by Alfred Chan (see all)
- Harris Technology to expand refurbished tech division amid rising demand from cost-conscious Australians - April 30, 2025
- Harris Technology secures major investment from Taiwan’s FSP Technology at 100% premium - March 10, 2025
- ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
1 Comment
paramountbaldivis
That was a great piece of content, I could completely relate to it. Especially how to pick a Real estate agent and what is the correct time to make a purchase like late summer and early fall. And also how online reviews can affect buying choices. A great one to share.
Reply