<p>At a time when interest in rail has been at it highest in 40 years, Babcock & Brown Infrastructure said yesterday it was seeking a 50% "co-investor" for WestNet Rail.</p> <p>It also comes at a time when the market has lost confidence in highly geared firms due to the global credit crunch.</p> <p>The planned divestment of half of Western Australia’s monopoly rail infrastructure owner and below rail access provider was part of a capital management review, which will see 50% of Powerco also on the block, BBI said.</p> <p>BBI presently owns 76% of WestNet and has extended the call option on the remaining 24% up to December.</p> <p>"In conjunction with the review, BBI has continued to evaluate a range of options to unlock value in its existing investments and consider initiatives to assist in closing the gap between the underlying value of the business and the current market price," the firm said. </p> <p>"In this context, and following a number of unsolicited approaches, BBI announces today that it has commenced formal price discovery processes with respect to identifying partners to co-invest in up to 50% of two of its core assets: WestNet Rail and Powerco. </p> <p>"BBI will apply the proceeds of any completed transaction to reducing corporate gearing and providing capacity for BBI to fund future accretive investment opportunities." </p> <p>Rail’s profile has been boosted this year by BHP Billiton and Rio Tinto’s access fight with Fortescue Metals in the Pilbara, where WestNet does not operate, high fuel prices coupled with impending emissions legislation, the proposed sale of Freightlink and the private equity offer for Pacific National parent Asciano.</p> <p>At an analysts briefing three weeks ago, BBI said there was significant growth potential from existing bauxite, alumina and iron ore mining customers and potential major iron ore development opportunities in the Mid West region.</p> <p>WestNet was seeking to increase haulage of haematite iron ore from 3mtpa to a target 12mtpa. </p> <p>It saw a potential for 10mtpa-20mtpa in proposed magnetite projects to come on rail and the potential to link other proposed major haematite projects to its network</p> <br />
