PERTH (miningweekly.com) – Freight operator Aurizon has struck an agreement with Magnetic Rail Group to divest of the East Coast Rial (ECR) business for A$425-million in cash.
ECR is the coal haulage business with operations in New South Wales and Queensland, which Aurizon acquired as part of its acquisition of One Rail Australia (ORA). In accordance with Aurizon’s undertaking to the Australian Competition and Consumer Commission (ACCC), the company had to divest of the asset.
In addition to the A$425-million purchase price, Magnetic will also assume ECR’s existing debt facilities, which was originally totalled at A$500-million.
“The sale provides the best outcome for Aurizon and its shareholders, delivering a strong sale price and certainty in completing the divestment,” said Aurizon MD and CEO Andrew Harding.
“We are pleased to have secured the sale of the ECR business and look forward to the transaction completing in early 2023. We have already successfully integrated the ORA bulk and general freight assets into our Bulk business and are excited about both the quality of these assets and the many opportunities for growth.”
Completion of the sale of ECR is subject to approval by the ACCC.
ECR has continued to operate independently of Aurizon since the ORA acquisition finalised in July 2022, with an independent board and management team. ECR will be classified as a discontinued operation in the half year financial statements, with the net profit after tax contribution shown separately to continued operations