Qantas repays debts

The Qantas Group has announced a major share buy-back and substantial debt repayments, reflecting the Board of Directors confidence in the value of the airlines operations, despite poor market performance.

The Group will repay $650 million in debt before investing $100 million in an on-market buy-back, estimated to return approximately four percent of Qantas shares, beginning December 2012.

The extensive restitutions are part of the Group’s plan to repay $1 billion in debt during FY2013.

“The Board believes the current Qantas share price does not reflect fair value of the Group, particularly considering the underlying strength of its domestic, loyalty and Jetstar businesses and the proposed partnership with Emirates,” Qantas chairman Leigh Clifford said.

“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.”

Qantas recently completed the sale of its stake in freight company StarTrack and cancelled orders for up to 35 Boeing 787 aircraft in August this year, providing the Group a net return of $750 million in FY2013.

“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,” Mr Clifford said.

Sourced: etravelblackboardasia