Linfox and Pacific National snap up Aurizon intermodal arm

By: Rob McKay


Two of three sections, based in Queensland, go while interstate operations are closed

Linfox and Pacific National snap up Aurizon intermodal arm
Aurizon Intermodal entails rail and road freight haulage

 

Linfox and Pacific National (PN) are to be the beneficiaries of Aurizon’s departure from intermodal operations.

The Queensland Intermodal business is to be sold to a consortium of the two local giants while the Acacia Ridge terminal is to be sold to PN.

Total consideration for the two transactions is $220 million but the deal is subject to Australian Competition and Consumer Commission (ACCC) and, due to PN’s ownership structure, Foreign Investment & Review Board (FIRB) approval.

The remaining Intermodal business, outside of Queensland, will be closed, Aurizon says.

Linfox and Pacific National

The Linfox-PN consortium will take up the containerised freight haulage and end-to-end freight forwarding capability on Queensland’s northern freight line.

"Forming a consortium with Pacific National is the first step towards purchasing these strategically significant assets which are currently owned by Aurizon Queensland Intermodal," Linfox says.    

"If successful, this acquisition will enable Linfox to improve the scale and scope of the freight forwarding services it offers to national and large Australian freight forwarding customers, including those delivering freight to northern Queensland."

If the PN transaction is cleared by the ACCC, Linfox will acquire and use the rail haulage capacity supplied by Pacific National for intra-state and interstate freight forwarding services to customers in Queensland and northern Queensland. 

The acquisition will also include pick-up and delivery and warehousing services, but exclude standard gauge haulage to and from Acacia Ridge and hook and pull contracts for train services.

Aurizon review

The Aurizon move follows a board-initiated 12-month review that "examined future commercial opportunities including divestment, joint venture, retention of the business, or closure of parts that did not offer a sustainable commercial future".

"In making the decision to exit, we considered the significant financial losses that have been sustained year on year by Aurizon Intermodal," MD and CEO Andrew Harding says.

"The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market.

"While a difficult decision for affected employees, exiting the business will allow the Company to focus on core, profitable parts of the Aurizon portfolio including the ability to recycle capital into other growing parts of our business."

Queensland Intermodal business sees the transfer of approximately 350 positions as well as assets, commercial and operational arrangements to the consortium.

Acacia Ridge

Separately, Aurizon has signed a binding agreement with Pacific National to sell its Acacia Ridge Intermodal Terminal.

That transaction includes the transfer of about 30 positions, as well as assets, commercial and operational arrangements.

If the Acacia Ridge transaction is not complete within six months, Pacific National will pay Aurizon an additional $5 million.

The interstate closure is expected to take effect by December, contingent on finalising transitional and commercial arrangements with customers.

About 250 positions will be affected.

"Aurizon will consult with employees on the transition to closure, including redundancy and redeployment options," the company says.

"Aurizon will work with its customers on transition arrangements and in the interim it will be business as usual, with the provision of safe and reliable services for customers particularly in the lead-up to the busy Christmas period."

The company will cascade standard-gauge rollingstock to other parts of its business as well as start a disposal process for surplus rollingstock and other surplus owned or leased assets.

Aurizon Intermodal assets

Aurizon Intermodal is a containerised rail and road freight haulage business for retailers, wholesalers and freight forwarders.

It comprises Queensland Intermodal and Interstate Intermodal.

Queensland Intermodal delivers services from Brisbane north, and includes freight depots, locomotives, wagons and road vehicles.

Interstate Intermodal delivers services outside of Queensland, including the Brisbane to Melbourne and Sydney-Perth routes, and includes freight terminals at Forrestfield, Perth (freehold) and Enfield, Sydney (leased), locomotives, wagons and road vehicles.

It includes the IMEX (import-export) service between Enfield and Port Botany.

IF FIRB approves the deal, PN will gain 66 hectare site includes narrow-gauge and standard-gauge freight terminals, marshalling yards and warehousing.

As part of the sale, a wagon maintenance facility on site, will continue to be operated by Aurizon under lease arrangements.

More to come

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