Rail-America moves to secure Freight Australia’s future

<p>Freight Australia’s parent company, RailAmerica, is to sell its Chilean railroad interests so that it can reduce long-term debt and concentrate on growing its core American and Australian businesses.</p> <p>The move bears out comments often made by Freight Australia CEO Marinus van Onselen that the Australian operation is not for sale and will be a long-term player in the rail freight market. </p> <p>Freight Australia has been having wide-ranging talks with the Victorian Government about its operations in the state. </p> <p>RailAmerica chairman Gary Marino said the parent company has an interest in Potrerillos Railway and 55% stake in Ferronor Railroad in Chile, hauling minerals, chemicals and petroleum. </p> <p>The Chilean operations account for about 5% of RailAmerica’s total revenue, with earnings before interest and tax of US$22m in 2001&#4702. This is expected to rise to US$26m in 2002&#4703.</p> <p>However, the business is not RailAmerica’s strategic focus and the company has engaged Credit Lyonnaise to sell its South American interests, Mr Marino said.</p> <p>"Although our Chilean operations have performed extremely well for RailAmerica, we are pursuing our strategic plan to reduce debt and focus on growing our core North American and Australian businesses," he said.</p> <p>"This proposed transaction will put us on track to eliminate US$19m of Chilean debt from our balance sheet as well as further de-lever the company using the proceeds from the sale," he said.</p> <br />