(Reuters) – Aurizon Holdings, Australia’s largest rail freight operator, mentioned on Friday it’ll promote its East Coast Rail (ECR) enterprise to Magnetic Rail Group for A$425 million ($284.71 million) in money.
Aurizon mentioned in a press release the sale was in accordance with its settlement with the nation’s competitors regulator, following its $1.75 billion acquisition deal for One Rail Australia (ORA) that was finalised in July 2022.
The ORA deal is predicted to assist Aurizon diversify from coal and add bulk capability, aiding its transition to greener vitality. Greater than a 3rd of Aurizon’s core earnings got here from coal in fiscal 2021.
“The (ECR) sale offers one of the best end result for Aurizon and its shareholders, delivering a robust sale worth and certainty in finishing the divestment,” mentioned Managing Director and Chief Government Officer Andrew Harding.
In October, a consortium together with non-public fairness companies Oaktree Capital Administration and Brookfield bid for Aurizon’s ECR operations.
Gross sales proceeds from the ECR deal will likely be used to cut back Aurizon’s debt, whereas Magnetic Rail Group will assume ECR’s current debt.
Aurizon shouldn’t be anticipated to make any capital tax positive factors from the deal, as a giant chunk of it, about A$125 million will likely be deferred for 12 months.
($1 = 1.4928 Australian {dollars})
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