The Qube Holdings Ltd (ASX: QUB) share price is inching higher at market open, after the company announced an update on the much anticipated sale of its Moorebank Logistics Park (MLP) project.
The Qube share price opened at $3.00, up by 0.33%.
What was the update
In a short release to the market, the logistics company advised that its negotiation with Logos Property Group is progressing constructively with the due diligence process substantially complete.
The company says significant progress was made on agreeing the key commercial issues for the 100% sale of its warehousing assets to Logos, while still retaining interest in the terminals assets.
The company says that Logos continues to “demonstrate a clear appreciation of the high quality and significant strategic value of the MLP.”
Qube says that both companies will continue to finalise the outstanding commercial issues in the near term, but has warned that there is no certainty that a transaction will occur.
What’s the Moorebank Logistics Park
MLB is Australia’s largest freight infrastructure project, and will link Port Botany direct to rail terminals and warehousing. It sits on a 243-hectare site just 35km from Sydney’s central business district.
The sale of this project has been on the cards since August, and a price tag of $2 billion has been mentioned.
This comes as Qube faces problems on its balance sheet, after reporting a 55% fall in annual profit to $87.5 million. Analysts have said that if Qube can’t offload Moorebank, it will be forced to recapitalise.
In September, Logos emerged as a contender to buy the asset, and the companies agreed at the time to enter into an exclusive negotiation period.
About the Qube share price
Qube is Australia’s largest provider of import and export logistics services. The Aussie company operates at more than 125 locations across Australia, New Zealand, Papua New Guinea and South East Asia.
The coronavirus pandemic has disrupted international commerce and logistics routes this year. The Qube share price is lower by 8% lower in 2020, after plummeting by 50% in May.
At today’s share price, Qube commands a market cap of $5.7 billion.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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