Asciano flattens out ACFS speed hump

By: Rob McKay


Sale and break-up deal impediment appears resolved

Asciano flattens out ACFS speed hump
ACFS is now in total control of its joint venture with Patrick.

 

Australian Container Freight Services (ACFS) and owners Arthur and Terry Tzaneros are the major beneficiaries of a deal that will allow the delayed Asciano sale.

ACFS has been in dispute with Asciano since the $9 billion break-up plan that it had not agreed to was sealed with Qube and several international investors.

That deal would have impacted negatively on ACFS, which owned half of joint venture (JV) ACFS Port Logistics with Asciano subsidiary Patrick, and was already the focus of Australian Competition and Consumer Commission (ACCC) concerns.

"The settlement of this dispute includes an agreement to transfer Asciano’s interest in the ACFS JV to the Tzaneros interests and to assign certain port head leases to the ACFS JV, being predominantly those ACFS currently sub-leases from Asciano," Asciano says.

"The agreement to transfer Asciano’s interest and the port head leases will take effect upon the Scheme being implemented.

"The Tzaneros interests will discontinue the proceedings commenced in the Supreme Court of New South Wales at that time.

"Two of the three potential competition concerns raised by the ACCC in its Statement of Issues released on 26 May 2016 focused on the vertical integration of Patrick container terminals with Qube Logistics and ACFS.

"Given the transfer of the Asciano interest in the ACFS JV to the Tzaneros interests, Patrick container terminals will be vertically linked with only Qube.

"As a result, as noted by the ACCC in its Statement of Issues, the degree of vertical integration following the transaction would be comparable to the current extent of vertical integration and accordingly, competition concerns would be less likely to arise."

Asciano’s fate has been marked by pragmatic approaches by interested parties seeking to avoid a costly takeover battle, with the breakthrough being a March carve-up deal between Qube and Canadian infrastructure investor Brookfield and their respective partners.

http://www.fullyloaded.com.au/industry-news/1603/asciano-carve-up-made-official-with-consortium-deal/

But that left ACFS defending provisions of its agreement last July with Asciano, given its JV portion would have gone to Qube, an ACFS competitor.

Asciano ascribed no value to the deal and but says it will release details of any further ACCC-related issues in due course.

ATN is awaiting a return call from ACFS.

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