FreightLink for sale despite light at end of tunnel

FreightLink was up for sale, the owner and operator of the Adelaide-Darwin railway said today.

Speculation swirled this morning as to the reason, with the Australian Financial Review , which valued the link at $1.2bn, saying banks led by ANZ had forced the sale after having run out of patience with poor volumes.

If true, it would say much about financial institutions' pain due to the subprime fallout.

An ANZ spokeswoman said the bank did not comment on customer's business.

The sale will come as a blow to FreightLink chief executive John Fullerton, an energetic advocate for the rail link, who had seen volumes rise on mining interest in the link with the Port of Darwin after a lean first few years.

Mr Fullerton had yet to return a call by deadline but said in a statement that FreightLink had achieved exceptional growth in a very short period and the business was well positioned to further expand its activities in the emerging minerals sector along the Adelaide-Darwin rail corridor.

“The sale of the business which we are announcing today will provide the opportunity for the new owners of FreightLink to capture substantial growth in the future, especially from the haulage of bulk minerals for export and to participate in new rail opportunities across the interstate network,” he said.

“Quality rail assets in Australia are highly regarded for their strategic value and this presents a rare opportunity for investors to acquire a rapidly growing business in the transport and logistics industry where rail will play an increasingly significant role."

FreightLink had appointed UBS as its sale adviser, he said.

Possible new owners include Asciano's Pacific National, QR, Babcock & Brown Infrastructure and, perhaps, Macquarie Bank.

"QR does not comment on speculation about commercial matters," a QR spokesman said.

Responses were awaited from the other companies at deadline.