Qantas expects underlying profit before tax this year of Aus$50-100 million, compared with Aus$552 million last year
Australian marketing baron John Singleton said Wednesday he has "always" been interested in ailing carrier Qantas but stopped short of confirming reports he is part of a consortium planning a takeover.
Singleton, a multi-millionaire who built his fortune in advertising, has been named in takeover talks for Qantas, whose shares dived to record lows last week after Standard & Poor's put its investment-grade credit rating on watch.
The airline has warned of a huge profit slump as it labours under stiff competition and soaring fuel bills coupled with the high Australian dollar and weakening global conditions due to Europe's sovereign debt crisis.
Singleton was cagey on reports that he, former Qantas boss Geoff Dixon and venture capitalist Mark Carnegie were plotting to take a major stake in the Flying Kangaroo, saying: "I'm not saying it's true or not true."
But he admitted he had "always" been interested in Qantas, describing it as undervalued and making assurances on its future.
"Qantas, if you bought all its shares for $1 billion tomorrow, you'd have $3 billion in cash in that company, cash... Is that a good deal or not?" Singleton told the Sydney Morning Herald.
"I'll buy anything that's got $3 billion in cash," he added.
"I wouldn't be worried about Qantas. Qantas has got a future."
Qantas chief Alan Joyce dismissed the need to raise fresh equity on Tuesday but confirmed the airline had formed a key management group to deal with any possible takeover bids that emerge.
It has also hired investment bank Macquarie Group to advise it in the event of any potential takeover, and Citigroup to watch its share register.
Joyce said no such bids had yet been made and both Emirates and British Airways have ruled out taking an equity stake, according to the Herald.
Qantas -- once a state-owned carrier that was fully privatised in 1995 -- was targeted by private equity consortium Airline Partners Australia (APA), led by the Allco Finance Group, in 2006.
Although backed by the Qantas board at the time, the Aus$11 billion (US$11 billion) offer was unsuccessful after it failed to win sufficient shareholder approval. Allco later collapsed.
Qantas expects underlying profit before tax this year of Aus$50-100 million, compared with Aus$552 million last year, and its shares have spiralled from Aus$6 before the financial crisis to a record low 96.2 cents last week. They bought $1.09 on Wednesday.