Star Track sell-off rumours gather speed


Qantas is considering selling its 50 percent stake in Star Track Express, a source close to the freight forwarder confirms

By Samantha Freestone | May 7, 2010

Qantas is considering selling its 50 percent stake in Star Track Express, a source close to the freight forwarder confirms.

A drop in Star Track Express’s profitability – which has fallen by 29 percent to $18.6 million in the past year – has motivated the airline to look at exiting the shareholding, the source says.

An analysis by Macquarie Equities estimates Qantas’ freight forwarding stake is tying up $288 million in operating cash.

Australia Post, which owns the remaining 50 percent share after founder of the carrier Greg Poche sold the company, is known to be considering buying-out the stake if Qantas puts its share on the market.

Analysts believe Australia Post is the logical buyer after its new boss, Ahmed Fahour, talked enthusiastically about the prospects of growing the government-owned corporation’s parcel and express delivery business in Australia.

But concerns Australia Post is also under financial pressure as a result of declining revenues from its core mail business has led many to believe the company could be bought-out from a third party.

Rumours that both Linfox and Toll are "sniffing around" should not be taken seriously, the source says.

"I wouldn’t put any weight in those rumours," the source says.

The source calls Australia Post CEO and Star Track Express director Ahmed Fahour "a dynamic and motivated individual."

"They are reviewing the strategy for their freight businesses, and they do this from time to time. Is it more likely something would happen now rather than before? I honestly can’t say," the source says.

"The only difference now is that there are new CEOs in both organisations and they are both motivated to make an impact on their revenue."

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