Media Kit » Try RailPrime™ Today! »
Progressive Railroading
Newsletter Sign Up
Stay updated on news, articles and information for the rail industry

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

View Current Digital Issue »


Rail News Home Rail Industry Trends


Rail News: Rail Industry Trends

Genesee & Wyoming, Wesfarmers to sell majority of Australian Railroad Group for nearly $1 billion


Genesee & Wyoming Inc. (GWI) is shifting from a half owner of a large Australian railroad to sole owner of smaller rail property Down Under. Yesterday, the short-line holding company and its joint venture partner Wesfarmers Ltd. announced they reached an agreement to sell the Australian Railroad Group’s (ARG) western Australia operations and certain assets to Queensland Rail (QR) and Babcock & Brown Ltd. for $956 million and another $18 million in estimated adjustments. GWI and Wesfarmers each own half of ARG.

QR will assume ownership of train operations and Babcock & Brown will become owners of ARG’s track infrastructure. The sale is expected to close in the second quarter pending customary closing conditions. The buyers have paid GWI and Wesfarmers a $66 million deposit.

GWI plans to use some of its $219 million share of cash proceeds from the sale to purchase Wesfarmers’ 50 percent interest in ARG’s South Australia operations for $15 million and repay $88 million of outstanding debt. GWI will become sole owner of the operations and rename the business Genesee & Wyoming Australia Pty. Ltd. After the sale, GWI will obtain $225 million in revolver capacity and retain $116 million in cash to pursue acquisitions.

“The value of the business to others in the Australian infrastructure and transportation sectors … is greater today than the value that we could create for our shareholders over the long term,” said GWI Chairman and Chief Executive Officer Mortimer Fuller III in a prepared statement.

Contact Progressive Railroading editorial staff.

More News from 2/14/2006