RailAmerica Backed Freight Victoria Consortium
Wins Australian V/Line Freight Bid
BOCA RATON, Fla.--(BUSINESS WIRE)--Feb. 22, 1999--RailAmerica, Inc. (Nasdaq NNM: RAIL - news) announced
today that Freight Victoria, a consortium in which it is a majority partner, has been selected as the successful bidder for V/Line
Freight Corporation (V/Line Freight) with a purchase price of approximately US$103.7 million (A$163.1 million). V/Line
Freight, the rail freight business of Australia's Victorian Government, provides services across southeastern Australia over
2,973 miles (4,756 km) of track. This sale by the Victorian government is a continuation of Australia's privatization process of
its rail system and the largest Australian state-owned rail freight business to be privatized to date.
The Freight Victoria consortium consists of RailAmerica, Inc., a Boca Raton, Florida-based international transportation
company; Macquarie Bank Ltd., a leading commercial and investment bank in Australia; Goninan, an Australian-based
manufacturer and maintainer of rolling stock; and Fluor Daniel, an international infrastructure maintenance and engineering firm
based in San Francisco, California. The transaction includes the purchase of 107 locomotives and over 2,800 rail cars, as well
as a long term lease of the V/Line Freight trackage.
Commenting on the consortium's selection, Gary O. Marino, RailAmerica's Chairman, President and C.E.O., said, ''This
acquisition, which is the largest to date for RailAmerica, is the culmination of eighteen months of hard work by our team of
Australian and U.S. experts. As we have demonstrated with our other rail acquisitions, we intend to improve V/Line Freight in
Victoria by providing quality rail transportation services that meet the needs of its customers, local communities and other
stakeholders. We are very excited by this latest addition, which, when consummated, will more than double the number of
route miles operated by RailAmerica internationally. In addition, as privatizations continue throughout Australia, we anticipate
participating in the bid process for Victoria's regional passenger operations, which we believe will complement Freight
Victoria's freight business.''
In fiscal 1998, V/Line Freight, centered in and around Melbourne, generated revenues of approximately US$79 million
(A$124 million) and moved over 8 million tons of freight. Commodities hauled include agricultural and grain products, minerals,
forestry and petroleum products, as well as intermodal traffic. For the first nine months of 1998, RailAmerica's consolidated
revenues were approximately US$56 million (A$88 million).
Freight Victoria plans to invest approximately US$23 million (A$36 million) in the first two years to improve infrastructure,
modernize or replace parts of V/Line Freight's locomotive fleet, as well as upgrade the Geelong grain loop to include standard
gauge. The consortium also plans to increase key bulk traffic flows including paper and logs, sand, grain and fertilizer.
Marinus van Onselen, Chief Executive of Freight Victoria and a former Managing Director of V/Line Freight, commented,
''Through this privatization process we have been able to identify the growth potential of this railroad within the state of
Victoria. Freight Victoria welcomes the Government's vision of growth in rail services and is confident that our dedicated staff
will work to achieve this.'' |
