- Qantas Airways has sold 13.8 hectares of land near its headquarter in Mascot, Sydney.
- Qantas has entered into a binding agreement with a consortium led by LOGOS Property Group.
- QAN has also entered discussions with the LOGOS about future development alternatives.
On Friday, Australia-based Qantas Airways Limited (ASX:QAN) announced to sell 13.8 hectares of land near its headquarters in Mascot, Sydney.
While entering into a binding agreement for the sale, the airline has booked proceeds of AU$802 million with the consortium led by LOGOS Property Group.
Utilisation of funds
The Group intends to utilise these funds to strengthen its balance sheet by repaying the debt accumulated during the COVID-19 pandemic. This will further help expedite the recovery of the Company. Currently, the transaction remains subject to certain terms and conditions.
The airline expects the settlement of the vast majority of the lots within the first half of the current financial year. QAN also expects reaching the net debt target range by the end of FY22.
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The Group will announce more details on the anticipated financial benefit of the land sale in its financial results in February 2022.
Source: © Jirsak | Megapixl.com
Qantas has also initiated discussions with LOGOS regarding prospective development alternatives of the sites they are acquiring. This includes building a committed precinct for QAN and the sale of a further 3 hectares of land that adjoins some sold out lots.
QAN looks forward to completing the evaluation of the proposals by early 2022. Moreover, in case an agreement is reached, the total deal value could rise beyond AU$1 billion.
Also, the sale of the largely underdeveloped land follows a three-month expression of interest process. This resulted in 18 bids from a variety of both local and global syndicates.
While LOGOS progresses its broader development plans, Qantas plans to lease back the parts of the land for a period in the meantime when relocation arrangements of some of the currently used land functions are being made.
The potential deal will present QAN with significant proceeds to support its recovery from the dislocations caused during the pandemic. All eyes remain on the finalisation of the deal and the way QAN decides to allocate these funds for recovery.
QAN stock was noted at AU$5.680 on 15 October 2021.