It failed before to find a buyer, but embattled rail operator Freight Link is once again up for sale
Despite a buyer failing to come forward to save Freight Link in 2008, the troubled operator of the Adelaide to Darwin railway has once again been put on the block.
The receivers of the company, KordaMentha, has appointed UBS Investment Bank as the advisor on the sale and anticipates a deal may be done.
“We have had discussions with a number of interested parties and are now ready to activate a formal sales process,” KordaMentha partner Martin Madden says.
Madden blamed the lack of interest in the carrier due to the declining market, but says the economy has now improved and Freight Link is performing well.
“The operational success of the railway in converting 90 percent of the general freight between Adelaide and Darwin to rail and securing three minerals projects in its first five years, with further significant opportunities in its pipeline, demonstrates its quality as an asset,” Madden claims.
Receivers were appointed in November 2008 after the Freight Link board was unable to complete a voluntary sale.
Madden says he is confident a buyer will be found and the prospects for the business under a new capital structure are positive.
But Toll boss Paul Little in 2008 ruled out buying Freight Link because he claimed the carrier was not worth the asking price.
Along with Scott’s, Toll is one of Freight Link’s biggest customers.
Freight Link has struggled to make a profit since its inception due to the heavy debt burden it incurred when it began.
The South Australian, Northern Territory and federal governments spent $1.3 billion setting up the operator.
Madden says the railway has generated significant economic benefits for the Northern Territory and South Australia has helped underpin a viable mining industry along the Adelaide to Darwin corridor.