Aurizon must continue operating its Queensland Intermodal business while the Federal Court hears a case brought by the Australian Competition and Consumer Commission over alleged anti-competitive behaviour.
Aurizon announced last year it would sell its Queensland Intermodal business, which employs roughly 350, to its biggest Australian competitor, Pacific National, and trucking group Linfox.
At the time Aurizon said it would simply close the business if the sale was blocked by the ACCC.
In July the ACCC not only rejected the deal, but launched court action alleging Aurizon and Pacific National came to “an understanding” aimed at reducing competition in the Australian market.
The ACCC simultaneously rejected a second deal for Aurizon to sell its Acacia Ridge terminal to Pacific National.
Aurizon said on August 13 it would continue to seek approval to sell Acacia Ridge to PN, but said it had cancelled the Queensland Intermodal sale altogether, and would shutter the business.
However, the Federal Court later that day granted an “urgent” interlocutory injunction requested by the ACCC, preventing Aurizon from shutting the business until the competition authority’s case is heard.
A two-week hearing is scheduled to begin on November 19.
The ACCC is seeking declarations, pecuniary penalties, costs, and orders from the court, restraining Pacific National from acquiring either the Acacia Ridge terminal, or the Queensland Intermodal business from Aurizon.
“It is part of the ACCC’s case that, at all times, Aurizon had alternatives to selling to Pacific National that would have been more competitive,” ACCC chairman Rod Sims said on August 13.
“The ACCC is aware of at least one alternative purchaser that is willing and able to acquire Aurizon’s entire remaining intermodal business.
“The ACCC will allege that it was more lucrative for Aurizon to agree to sell parts of the intermodal business to the closest competitor and close parts of that business than it was to sell the whole intermodal business to a new entrant.”
Aurizon has flatly denied all allegations regarding anti-competitive behaviour.
After the Federal Court handed down its decision, the rail firm reiterated its intentions to shut the Queensland Intermodal business.
“Aurizon has previously stated that where the ACCC blocked the sale of Queensland Intermodal, Aurizon would exit the business as that represented the next best alternative currently before the Company,” Aurizon said in an ASX statement.
“Aurizon has terminated the Business Sale Agreement between Aurizon and the consortium of Pacific National and Linfox. Aurizon will not seek clearance of the Queensland Intermodal transaction through the Court. Aurizon’s intention continues to be to exit its Intermodal business.
“Aurizon will comply with the orders of the Federal Court today but intends to exit that business when it is free to do so.”
Aurizon returned $10 million to Pacific National when it cancelled the Queensland Intermodal deal.
The Acacia Ridge sale would be worth $205 million, $35 million of which has already been paid by Pacific National to Aurizon.