AusRAIL, Market Sectors

Asciano confirms port sale plans

<span class="" id="parent-fieldname-description"> Pacific National owner Asciano has confirmed it is looking to sell off a large stake of its ports business Patrick to reportedly Chinese buyers, following recent media speculation. </span> <p>The move would potentially see the logistics business sell off a non-controlling interest in its Terminals &amp Logistics division to new Newcastle port part-owner China Merchants (the rumoured second party).</p><p>That development could eventually lead to Asciano pulling out of the ports business entirely, some consultants have suggested.</p><p>If so, the company would find a new, singular focus on the other side of its business, Pacific National, Australia’s second largest&nbsp rail freight operator which handles bulk and containers from various inland regions to major coastal ports on Australia’s east and southeast coast.</p><p>That would certainly heat up the continuing competition between Pacific National and fellow rail haulier Aurizon the pair compete regularly for work on the east coast of Australia, mostly in the coal haulage business.</p><p>“Asciano notes recent media speculation and confirms that it has been, and continues to be, in discussions with third parties in relation to a potential sale of a non-controlling interest in its Terminals &amp Logistics business division,” the company told the stock market late last week.</p><p>“These discussions are preliminary and incomplete and no agreement has been reached with any parties at this stage.”</p><p>While the company gave no assurances that an agreement will be reached or that any transaction will take place, a sell off of part of Patrick has been on the cards for some time.</p><p>Asciano, currently geared at around 2.8, would be able to earn roughly $1.5 billion in cash for the sale of a non-controlling stake in its Terminals &amp Logistics division, according to analysts, reducing that gearing to around 2.3 – a figure much closer to a traditionally manageable gearing ratio.</p><p>Asciano is currently in $3.3 billion of net debt, further enhancing speculation that a part-sale of Patrick would lead to a full sell-off further down the road.</p><p>China Merchants, cited by most sources as the potential buyer for the stake in Patrick, paired with Hastings Funds Management to buy the Port of Newcastle off the NSW state government for $1.75 billion earlier this year.</p><p>The Hong Kong-based group, which is owned by the Chinese government, operates within three key investment sectors: infrastructure and transportation, financial investments, and property.</p><p>Last year it acquired a 49% share of French business CMA CGM’s Terminal Link, which holds container terminals in eight countries.</p>