ASX 200 (XJO) drops 1.1%, QLD shuts border

The ASX 200 (ASX: XJO) is currently down more than 1.1% as uncertainty persists due to COVID-19.

Queensland has announced that it will shut its border to NSW and the ACT. There were too many cases in NSW and some people were apparently flying from Sydney to Canberra and then to Queensland, which is why ACT has also been blocked. Victoria is going to report another 725 cases.

Telstra’s (ASX: TLS) big asset sale

Telstra has announced the sale of its data centre complex in Clayton (Victoria) for $416.7 million.

The site is 25km from the Melbourne CBD and it includes 10 buildings including Telstra’s newest 6.1MW data centre and the nearby 6.6MW data centre and the linked energy centre.

The sale includes a triple-net lease-back arrangement which means Telstra will retain ownership of all the IT and telco equipment as well as ongoing operations and responsibility for building upgrades and repairs, future capital expenditure and security.

Telstra’s lease is for an initial period of 30 years with two 10-year options to extend the lease.

Telstra CEO Andrew Penn said the sale was part of the company’s ‘T22’ long term strategy:

As part of T22, we have an ambition to monetise up to $2 billion worth of assets to strengthen our balance sheet. This deal means we have no reached over $1.5 billion. Data centres are an incredibly important part of the digital ecosystem and we continue to own and operate world-leading facilities in Australia and overseas.”

The Telstra share price is down 2%.

Virgin’s (ASX: VAH) rescue plan

The main element of the plan is to reduce expenses until the global travel market recovers.

The new owners of Virgin, Bain Capital, are going to reset Virgin Australia to meet the lower global and Australian demand.

Virgin expects around 3,000 job cuts as a result of the business plan. However, Virgin said that it will save around 6,000 jobs when the market recovers with “aspirations” for up to 8,000 in the future. Employees that leave will be helped with a support program and have all entitlements honoured and be provided with a two-year extension of employee travel benefits and early access to retiree and long service benefits. Remaining employees will continue to receive jobkeeper.

The airline said it plans to move to an all-Boeing 737 fleet for domestic and short haul operations. The airline’s regional and charter fleet will remain while it reviews its options for the Virgin Australia Regional Airlines.

Other cost-saving measures include a review of all supplier contracts and move its HQ. It has already consolidated its Sydney corporate offices.

International flights to LA and Tokyo will continue to be suspended.

The Tigerair brand will be discontinued, though it will keep its Air Operator Certificate for future optionality.

The revived airline’s management said that all travel credits and velocity and frequent flyer points will be carried forward under the new ownership.

Virgin plans to invest heavily in the ‘digital re-platforming’ of both the airline and frequent flyer program. Management said this would increase the pace of profitable revenue growth.

Investors bet on Pointsbet (ASX: PBH)

The Pointsbet share price is up around 2% after announcing another win in the US.

Pointsbet is winning partnerships with professional US sports teams. Today, it announced an agreement with the Indiana Pacers from the National Basketball Association (NBA) to be an official sports gaming partner.

The bookmaker’s branding will be displayed along the out-of-bounds space between the baseline and the team bench. This is the first time a sports betting operator will occupy that space.

Pointsbet signage will also be displayed throughout the Pacers’ home area Fieldhouse. Pointsbet will also have a presence on the Pacers’ digital platforms.

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