Genesee & Wyoming subsidiary Genesee & Wyoming Australia (GWA) is buying Glencore Rail (GRail) for A$1.14 billion. It will also concurrently issue a 49 percent equity stake in GWA to funds managed by Macquarie Infrastructure and Real Assets (MIRA).
“The acquisition of Glencore Rail solidifies GWA’s position as the most efficient rail operator with the highest service quality in the Australian rail market,” Jack Hellmann, President and CEO of G&W, said in a news release. “Through the acquisition and 49 percent new equity issued to MIRA, we are effectively doubling the size of GWA and retaining 51 percent of a business with stronger long-term free cash flow and a significant portion of GWA’s rail shipments under long-term, take-or-pay contracts.”GRail’s coal haulage business was established in 2010 as an alternative rail service provider to the incumbent railroads in the Hunter Valley and has grown to be the
GRail’s coal haulage business was established in 2010 as an alternative rail service provider to the incumbent railroads in the Hunter Valley and has grown to be the third-largest coal haulage business in Australia. G&W’s Freightliner Australia subsidiary (acquired by G&W in March 2015) has been the rail operator of GRail since inception and presently provides haulage and logistics services for approximately 40 million tons per year of steam coal.
These services will continue following the GRail transaction, the company said.
