AusRAIL, Market Sectors

FMG rail sale delayed

<span class="" id="parent-fieldname-description"> The sale of a stake in Fortescue Metals Group’s coveted rail infrastructure will be delayed by some months, the Pilbara iron ore miner announced last Thursday. </span> <p>FMG attributed the delay to a high level of interest in its rail and port assets which are wholly controlled by the company’s subsidiary, The Pilbara Infrastructure, and include 280km of railway and access to Port Hedland.</p><p>The company said it was not under any pressure to conclude the sale which is <br />well advanced and progressing well in accordance with expectations.</p><p>FMG expects to make an announcement in September.</p><p>“We are pleased with the progress to date, having shortlisted potential investors and advanced to the next phase of the commercial process,” FMG CEO Nev Power said.</p><p>“With our strengthening balance sheet, growing cash at bank and permanent restructure of operating costs, we will only execute a deal that delivers obvious value for our shareholders.”</p><p>FMG unveiled plans late last year to offload a minority stake in its rail and port assets to help shore up its debt-laden balance sheet amid volatile iron prices. FMG expects to report a US$10bn net debt on June 30.</p><p>Analysts have estimated that FMG will sell around 40% of assets. A minority interest however, would leave investors with a lack of control over the rail asset. While Aurizon is tipped to be a potential buyer reports suggest the company would only go-ahead with the sale if it retained a majority stake in the assets. </p><p>Brookfield Infrastructure Partners, parent company of WA rail operator, Brookfield Rail, has also been suggested as a shortlisted investor.<br /><br />&nbsp</p>