Arab Today, arab today troubled qantas in debt share buyback plan
Last Updated : GMT 01:04:00
Arab Today, arab today
Arab Today, arab today

Troubled Qantas in debt, share buyback plan

Arab Today, arab today

Arab Today, arab today Troubled Qantas in debt, share buyback plan

Sydney - AFP

Qantas said on Thursday it would accelerate Aus$650 million (US$675 million) in debt repayments and buy back shares worth Aus$100 million in a bid to shore up its ailing stock and boost confidence. The Australian airline\'s chairman Leigh Clifford said the on-market buyback, which represents about four percent of total Qantas stock, and early debt repayment reflected the board\'s confidence in the carrier\'s improving fortunes. \"Our continued progress towards the turnaround strategy for Qantas International, plus cash inflows from recent transactions, gives the board confidence to approve these capital management measures,\" Clifford said. \"The share buy-back and accelerated debt reduction reflect the board\'s goal of returning value to shareholders and maintaining a strong balance sheet, as well as retaining the flexibility to pursue current growth initiatives.\" The Aus$650 million debt repayment five months ahead of schedule was part of a Aus$1 billion debt reduction drive for the 2012-13 financial year, Qantas added in a statement to the Australian stock exchange. Both it and the share buyback would be funded by the recent sale of Qantas\'s stake in freight company StarTrack and settlement from Boeing on its B787 order, which had brought $750 million into the company\'s coffers, it said. Qantas stock closed up 4.07 percent at Aus$1.28 in a broadly lower market. Clifford said the board believed the current share price \"does not reflect fair value\" given the recent sealing of a mammoth partnership with Emirates on its international routes and strength of its domestic business. The \"Flying Kangaroo\" hopes the 10-year tie-up with Emirates, unveiled in September, will boost its push into Asia and help stem losses at Qantas International -- spun off earlier this year as a separate business. Intense competition in the region, rocketing fuel costs and the strong Australian dollar saw Qantas post its first loss since privatisation in 1995 back in August, plunging Aus$244 million into the red. It was a significant reverse from a net profit of Aus$250 million a year earlier, and prompted ratings agency Standard and Poor\'s to downgrade the airline from BBB to BBB- due to what it described as \"structural issues\". Qantas said it would also slash capital expenditure by Aus$100 million to Aus$1.8 billion, forecasting underlying profit before tax of Aus$180-230 million for the six months to December, comparable to Aus$202 million in the same period last year. It added that the \"outlook for the second half of FY13 remains volatile and, given the uncertainty in global economic conditions, fuel prices and foreign exchange rates it is not possible to provide further guidance at this time\".

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Arab Today, arab today troubled qantas in debt share buyback plan Arab Today, arab today troubled qantas in debt share buyback plan

 



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