Australia's Qantas to sell land for $595 million to cushion pandemic blow

·1 min read
FILE PHOTO: Qantas aircraft are seen on the tarmac at Melbourne International Airport in Melbourne

SYDNEY (Reuters) -Australia's Qantas Airways Ltd said on Friday it had agreed an A$802 million ($595 million) deal to sell land near Sydney Airport to a consortium led by LOGOS Property Group to reduce debt, as the carrier recovers from pandemic lows.

Settlement of most of the lots is expected in the current half ending Dec. 31, the airline said in a statement.

"We'll use these funds to help pay down debt that we've built up during the pandemic," Qantas Chief Executive Alan Joyce said. "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."

Qantas shares were trading 2.3% higher at 00:00 GMT, ahead of a 0.5% gain in the broader market.

Qantas said it had also entered talks with LOGOS about potential future development options for the sites being acquired, including a dedicated precinct for the airline and the sale of additional land near the lots being sold.

The airline said it expected to complete the evaluation of those proposals in early 2022 and if an agreement was reached, it had the potential to raise the total value of the deal to more than A$1 billion.

LOGOS said the purchase was backed by the Abu Dhabi Investment Authority via the LOGOS Australia Logistics Venture as well as pension fund AustralianSuper.

It plans to develop the site into a logistics, e-commerce and last mile logistics hub. On completion, the development is forecast to have an end value of A$2 billion, LOGOS said.

($1 = 1.3486 Australian dollars)

(Reporting by Jamie Freed in Sydney and Savyata Mishra in Bengaluru; Editing by Karishma Singh and Stephen Coates)

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