TORONTO — Genesee & Wyoming is pulling out of Australia.The short line holding company is selling its 51% stake in its Australia operations, which serves New South Wales, the Northern Territory, and South Australia, including the 1,400-mile Tarcoola to Darwin rail line.
The move comes as G&W is being taken private in an $8.4-billion deal led by Brookfield Infrastructure Partners.
G&W is selling its stake to its Australian partner, Macquarie Infrastructure and Real Assets, which held a 48.9% share of the partnership.
The transaction is expected to close by the end of the year, subject to regulatory approval, alongside Brookfield’s acquisition of G&W, Brookfield executives said during the company’s second quarter earnings call on Friday morning.
Brookfield says the company aims to maximize commercial opportunities on G&W lines, continue to expand through acquisitions, and improve profit margins on G&W’s current railroads through a combination of revenue growth and cost-cutting.
G&W operates 120 railroads in North America and also has operations in Europe.
G&W Australia provides intermodal service six days per week on the Adelaide-to-Darwin corridor as well as intrastate haulage of bulk commodities including grain, steel and minerals, and hauls coal in New South Wales.
The Australian operations contributed about 10% of G&W’s overall operating income. Coal generated 42% of Australian revenue, followed by intermodal at 23%, and metallic ores at 21%.
G&W’s Australian operations date to 1997, when it privatized the Australia Southern Railroad. In 2000, the Australian Railroad Group was formed in a 50% venture with a partner, which G&W subsequently purchased six years later.
G&W acquired the Tarcoola to Darwin line in 2009, which at the time was the company’s largest acquisition to date.
So are the short lines leaning the way the Class1’s are operated?
Funnily enough Brookfield operates several thousand miles of track in Western Australia through its subsidiary Arc Infrastructure.
I believe what the article says is the Australia operations are not included in the takeover by Brookfield Infrastructure Partners. They are being sold separately.
I I think they brought the rights to the line, the track remains govt owned.
= Improve profit margins through a combination of revenue growth and cost cutting=
In other words, Look out customers, here it comes!
Fake news Trains. The Australia operations were not included in the sale.
Always makes you wonder when change happens, but on the other hand, Australia is a long ways from North America. Guess we’ll just have to see what’s next.
Does G&W still want to run Freightliner in the UK, esp. due to Brexit?
Does G&W still want to run Freightliner in the UK, what with the Brexit situation?