AUSTRALIA: Aurizon has signed a binding agreement to sell its East Coast Rail coal haulage business to Magnetic Rail Group. Completion is expected in early 2023.
Aurizon undertook to divest ECR as part of regulatory approval for its acquisition of One Rail Australia. The takeover was finalised in July and ORA’s bulk and general freight assets were integrated into Aurizon, but ECR has continued to operate with an independent board and management team while Aurizon undertook a dual-track process for divestment through a trade sale or a demerger.
Magnetic is a wholly-owned subsidiary of Magnetic Infrastructure Group, a 50:50 joint venture of coal trading company M Infrastructure Group and Indonesian ports and shipping group Asian Bulk Logistics.
Aurizon is to receive cash proceeds of A$425m, including A$125m deferred for 12 months, and the purchaser will assume ECR’s existing debt facilities which originally totalled A$500m.
‘The sale provides the best outcome for Aurizon and its shareholders, delivering a strong sale price and certainty in completing the divestment’, said Aurizon Managing Director & CEO Andrew Harding when the sale agreement was signed on December 16.
Law firm Johnson Winter Slattery advised Magnetic Rail Group on the deal.
