Patrick set to start break-up of Pacific National

<p>Patrick Corporation is expected to start moving shortly to break up Pacific National, after revealing on Friday (January 20) that the rail operator’s performance had deteriorated massively during the bitter fight between its shareholders.</p> <p>Pacific National can be dissolved under the existing shareholder agreement between Patrick and Toll Holdings. </p> <p>This allows for the assets, including rolling stock, terminals, and train paths, to be auctioned off between the two existing partners. </p> <p>The break-up of Pacific National would also open the way for Patrick to get Australian Competition and Consumer Commission approval for its earlier foiled takeover of rail forwarder and terminal operator FCL Interstate Services. </p> <p>Patrick said on Friday that it expected Pacific National’s first half profits to be down 48% to $29m over the same period last year, and said it was "gravely concerned" about the short-term outlook.</p> <p>"We’re frustrated," Patrick managing director Chris Corrigan said. </p> <p>"Pacific National is going to hell in a hand basket &#8230 while Toll fiddles with a takeover. </p> <p>&#8220It is a frustrating, value destroying process."</p> <p>Pacific National has no chief executive and no heads of intermodal or commercial operations. Mr Corrigan said Pacific National’s figures would be below budget, "if there was an agreed budget for the financial year".</p> <p>Meanwhile, Toll said on Friday that it had resumed discussions with the ACCC in an effort to revive its bid, amid market views that only a huge divestment of its rail operations would satisfy the regulator on control of strategic infrastructure. </p> <p>Mr Corrigan also stressed the sweeping scale of the ACCC’s earlier rejection as an obstacle to any new talks.</p> <p>"How can new undertakings be delivered?&#8221 he asked. Toll was not able to deliver on the earlier, more specific undertakings, he said. </p> <p>The ACCC had raised "broad issues of vertical integration between port assets and rail terminals. There was a board principle of the removal of Patrick as a competitor &#8211 a second level of concern", he said. </p> <p>Mr Corrigan said Toll had ignored the ACCC’s questions on vertical integration of ports and inland logistics "because there is no real solution". </p> <p>"They had to ignore them, hoping that they would go away while they distracted people with issues on the Bass Strait and auto logistics," he said. </p> <br />