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bobcarey
Assistant Commissioner
Joined: Jun 19, 2004
Last Visited: Aug 13, 2008
Location: offrail
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Posted: Wed Mar 05, 2008 7:53 pm
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Asciano pushes ahead with rail freight pullout
Posted Wed Mar 5, 2008 8:32am AEDT
* Map: Mildura 3500
Freight firm Asciano says it is still planning to complete its pullout from its Victorian rail freight operations within two or three weeks.
A company spokesman told a shareholder briefing this week the restructure of its grain operations was continuing, with voluntary redundancies completed and forced redundancies now underway.
The company said heavy losses in grain freight were unacceptable and unless all financial risk in the operation could be mitigated, the withdrawal would be completed before the end of March.
The chairman of Victoria's councils rail freight alliance, Vernon Knight, says it is likely the State Government will have to offer more than the $20 million package it has offered to rescue Victoria's rail freight system.
"I can only assume and trust that the Victorian Premier and the Government will be as worried about that announcement as I and the members of the alliance are," he said.
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ParkesHub
Chief Commissioner
Joined: Jul 29, 2003
Last Visited: Nov 8, 2008
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Posted: Wed Mar 05, 2008 8:13 pm
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| bobcarey wrote: |
The chairman of Victoria's councils rail freight alliance, Vernon Knight, says it is likely the State Government will have to offer more than the $20 million package it has offered to rescue Victoria's rail freight system.
"I can only assume and trust that the Victorian Premier and the Government will be as worried about that announcement as I and the members of the alliance are," he said. |
Jeez...the Arseiano blokes are really going for broke aren't they? How much more will Brumbles pony up?
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DalyWaters
Deputy Commissioner
Joined: Oct 31, 2006
Last Visited: Nov 20, 2008
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Posted: Wed Mar 05, 2008 8:20 pm
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| Quote: | | Jeez...the Arseiano blokes are really going for broke aren't they? How much more will Brumbles pony up? |
The $20 million goes to the freight forwarders who can choose whichever rail company they wish. The government is not handing the cash direct to PN. At last, a sensible decision.
Now, we just need the government to buy a rental pool of broad gauge container and grain wagons and/or get on with standardising.
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ParkesHub
Chief Commissioner
Joined: Jul 29, 2003
Last Visited: Nov 8, 2008
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Posted: Thu Mar 06, 2008 8:04 pm
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| DalyWaters wrote: | | Quote: | | Jeez...the Arseiano blokes are really going for broke aren't they? How much more will Brumbles pony up? |
The $20 million goes to the freight forwarders who can choose whichever rail company they wish. The government is not handing the cash direct to PN. At last, a sensible decision.
Now, we just need the government to buy a rental pool of broad gauge container and grain wagons and/or get on with standardising. |
Yes, that much is true but it's pretty much going that way since there aren't too many options for intra state container moves.
But no-one is going to pool containers. Who maintains them? Who cleans them? Containers require a fair amount of upkeep. Added to that is the great variety of container dimensions and functions for various uses. What suits grain cartage doesn't suit pallet-wide cartage.
NRC tried a trailer pooling scheme years ago at Dynon but it never worked out.
Pooling is a good concept but pretty hard to put into practice. It's not impossible but is problematic.
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DalyWaters
Deputy Commissioner
Joined: Oct 31, 2006
Last Visited: Nov 20, 2008
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Posted: Wed Apr 30, 2008 4:22 pm
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| Quote: | Asciano boss Mark Rowsthorn will have been heartened by the success of the recent Wesfarmers issue as he works out the best way to raise capital without spooking an already sceptical investor base.
He's just lost his chief financial officer Austen Perrin and his leveraged infrastructure company needs cash.
Although the retail part of the Wesfarmers $2.5 billion raising is yet to be priced, the accelerated rights issue format looks a smart move.
There had been 'shorts' aplenty in the big conglomerate. The jury was out, and remains out, on the ambitious Coles acquisition.
Still, the shorts got trapped and squeezed as Wesfarmers shares were suspended for the issue.
Global markets then did Wesfarmers chief Richard Goyder a favour and boomed for a couple of days. ''Long only'' institutional players were convinced to hold their position. Goyder has his money in the kick, and the banks off his back.
Whereas Goyder had found equity was simply cheaper to raise than debt - debt which had been priced between 7%-8% when the Coles transaction was struck last year is now priced at 11%-12% - his opposite number at Asciano is going to find both debt and equity expensive.
For a start, the banks probably won't lend Rowsthorn any more money until he puts more equity in the Asciano coffers. The rail and ports operation already did a refinancing two months ago.
And Asciano's stock price is on its knees, rendering equity expensive, and unless shareholders take up a rights issue, dilutive to boot.
Rowsthorn has looked at hybrids, such as a convertible note issue, and he's looked at raising straight equity. A deeply discounted rights issue may be the best option.
Shareholders all get to participate, equally, and get to enjoy the discount, equally.
Were he to opt for a placement or hybrid issue, though, his brokers would be inclined to structure it lavishly - especially in the present climate - to deliver their clients a cheap entry into the stock. Long-suffering Asciano shareholders would be diluted.
Besides word getting out of market soundings, the brokers are talking.
According to a note from Merrill Lynch, Asciano faces a "$360 million funding gap (which) could be reduced to $250 million by introducing a (Dividend Re-investment Plan) and flattening the distribution to 46c''. A more severe cut to the distribution, says the broker, or an equity raising would still be required to make up the $250 million.
Despite his apparent need for cash, and onerous debt of $4.5 billion, Rowsthorn is still talking about spending $1.2 billion in capex between now and 2010, bursting into the Queensland rail coal market ($512 million on Merrills numbers) plus another $550 million in general capex on ports and rail.
There is also talk about selling 20% of Asciano's port assets to a super fund or sovereign fund to raise $1 billion.
Problem is he wants too high a price for a minority stake. And then there is the nightmare scenario - slowing growth.
A note from the JP Morgan analysts who follows the stock says JP is still forecasting a 4% growth in ports earnings for 2009 and 5.5% growth in car imports.
"If both were to experience zero growth in FY09, this would reduce our forecast EBITDA by 2% and NPAT by 25%.''. The risks are a "slowdown in import container volumes, cuts to distributions and further debt and equity market volatility''.
Talk about DRPs and cutting the distribution, though, probably don't address Asciano's situation adequately.
Frankly, this has been a mess since it split from Toll Holdings.
Not only did it strap on huge leverage at the peak of the cycle last year, it then went out with an abortive takeover plan for a company three times its size in Brambles, presumably using even more debt. That was abandoned.
Management then claimed the Brambles position was in the black and Asciano would exit profitably - it took an $85 million loss recently.
It was forced to pull back earnings guidance and later refinance its debt, after telling the market everything was hunky dory.
The days of fancy leveraged infrastructure acquisitions and asset juggling are over. There is evidence that container volumes growth is slowing.
These account for more than 80% of the ports division earnings. With Asciano's gearing, a small decline in EBITDA turns into a large hole in the bottom line. Rowsthorn is walking a tightrope.
Talk of acquisitions is tough indeed. |
From The Age 30-4-08, under the heading "Asciano, Cap In Hand"
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MEASWELL
Station Master
Joined: May 01, 2006
Last Visited: Nov 21, 2008
Location: werribee/tullamarine
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Posted: Tue May 06, 2008 10:11 am
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in the herald sun this morning
TRANSPORT infrastructure firm Asciano Group has finalised agreements with grains marketer GrainCorp Ltd to provide export grain rail haulage services.
Asciano's rail subsidiary, Pacific National, will contract to GrainCorp eight trains that will service GrainCorp's export haulage requirements in NSW and Victoria on a take-or-pay basis.
Pacific National will receive additional variable payments for export grain volumes moved.
Asciano said the agreements would deliver commercially viable outcomes for Asciano for the next five years.
Asciano said that securing a take-or-pay contract with GrainCorp reduced Asciano's risk in its grain business and would ensure an acceptable rate of return.
"We are very pleased to have reached a conclusion that drives supply chain efficiency and satisfies the needs of the grain industry and of Asciano security holders," Asciano chief executive Mark Rowsthorn said.
Mr Rowsthorn noted that the Australian Bureau of Agricultural and Regional Economics is predicting a bumper winter grain crop this year.
"Asciano will be well placed to benefit from any upside while ensuring the grain business remains viable in the event that drought conditions persist," Mr Rowsthorn said.
Asciano also said it had resolved its broadacre obligations with the NSW government and would invest in the future of the export grain rail haulage market in NSW.
The $70 million broadacre obligation will reduce by $30 million upon the transfer of a number of branch line rail assets that Asciano no longer intends to operate beyond the date of transfer.
The assets will be transferred from Asciano to an entity nominated by the NSW government.
Certain elements of ongoing maintenance capital expenditure on main line locomotives used in the NSW export grain business will be credited against the remaining obligations.
Asciano said it therefore expected its obligations under the broadacre agreement to reduce to zero within five years.
Asciano shares were 21 cents higher at $4.46 today.
feats don't fail me now!!!!!
i blow my nose at you you sons of a silly person
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ParkesHub
Chief Commissioner
Joined: Jul 29, 2003
Last Visited: Nov 8, 2008
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Posted: Tue May 06, 2008 10:43 am
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| ParkesHub wrote: | | bobcarey wrote: |
The chairman of Victoria's councils rail freight alliance, Vernon Knight, says it is likely the State Government will have to offer more than the $20 million package it has offered to rescue Victoria's rail freight system.
"I can only assume and trust that the Victorian Premier and the Government will be as worried about that announcement as I and the members of the alliance are," he said. |
Jeez...the Arseiano blokes are really going for broke aren't they? How much more will Brumbles pony up? |
How predictable! Well done Arseiano in getting back into grain haulage now that the Vics have coughed up for the track upgrades.
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CaseyJones
Chief Commissioner
Joined: Nov 12, 2004
Last Visited: Nov 21, 2008
Location: A little south of sanity
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Posted: Tue May 06, 2008 5:21 pm
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| The Tamworth Leader wrote: | NSW, Vic, Deal struck for haulage of wheat to export ports
FEARS a bumper 2008 winter wheat crop might not have been able to make it from country NSW and Victoria to the export ports because there was no transport agreement in place between GrainCorp and Pacific National were laid to rest late yesterday.
Independent member for Tamworth Peter Draper told The Leader an agreement had been reached between rail freight company Pacific National – a subsidiary of the Asciano Group – and Grain Corp.
“This is fantastic news as far as I am concerned,” Mr Draper said.
“It (the lack of an agreement and the threat to wheat rail freight services) has been of great concern to country people for a long time.
“I am very pleased to see there has been a resolution to this impasse.”
Asciano Group and State Transport Minister John Watkins released separate statements late yesterday confirming agreement had been reached and that arrangements were now in hand to ensure grain was hauled by rail to Port Kembla and Newcastle for export.
“As part of the agreement Pacific National will upgrade 30 of its 81 class locomotives for grain haulage use,” Mr Watkins said.
“Pacific National will continue with branch line operations until June 30, 2009.”
The Iemma Government is investing an extra $30 million in the country regional rail network next year as part of the deal.
This is in addition to a $15 million spend on branch lines including the grain lines.
The Asciano Group said the deal would deliver “commercially viable outcomes... for the next five years”. |
I would love to know the specifics of this deal.
Are we as NSW taxpayers funding the upgrade of 30 81 class units?
Cheers
GLRPS Member
Comments made are that of my own, and do not reflect those of organisations I am associated with or have mentioned here
At the end of the day...dude, who gives a smeg? Yes or no?!
Vale ARG NSW - the end of a golden (or orange) era - November 22, 2008
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42101
Banned
Joined: Oct 12, 2005
Last Visited: Sep 27, 2008
Location: Banned
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Posted: Tue May 06, 2008 5:30 pm
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Upgrade 30 x 81 class for grain haulage why bother they have always hauled the grain just as they were......or should it be....overhaul 30 x 81 class.
Banned
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nutbagg
Assistant Commissioner
Joined: Feb 11, 2007
Last Visited: Nov 18, 2008
Location: In Willy Wonka's Chocolate Lake
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Posted: Wed May 07, 2008 12:58 am
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| Asciano wrote: |
This $70 million Broadacre obligation will reduce by $30 million upon the transfer of a number of ‘branch line’ rail assets that Asciano no longer intends to operate beyond the date of transfer. These assets will be transferred from Asciano to an entity nominated by the NSW Government. Certain elements of ongoing maintenance capital expenditure on main line locomotives used in the NSW export grain business will be credited against the remaining obligations. As a consequence, Asciano expects its obligations under the Broadacre agreement to reduce to zero within 5 years."
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So they can claim maintenance as part of the obligation and get off scott free; then transfer these fully overhauled and well maintained 81's into coal later? I'm guessing it won't be the same group of 81's in the grain pool when this is finished!
| ABC wrote: |
NSW Govt secures $45m grain rail deal
Posted Tue May 6, 2008 8:09am AEST
The New South Wales Government says an agreement has been reached to secure the future of rail grain transport in rural areas.
Pacific National announced its decision to stop transporting export wheat in February.
Farmers across the state have since faced uncertainty over whether the next harvest would reach the export market.
But late yesterday, Transport Minister John Watkins announced a compromise had been reached that would see services secured until mid-2009.
Under the deal, the Government has promised to spend $45 million improving rail infrastructure and grain lines.
Mr Watkins says he is pleased a grain transporting deal has been reached.
"Under the agreement, Pacific National will upgrade 30 of its 81 class locos for grain haulage, so there's a long-term commitment there," he said.
"We're pleased to be able to assist in the resolution of that issue. I think coming out of this agreement is a long-term commitment from Pacific National for grain haulage."
The Nationals MP for Barwon in the state's north-west, Kevin Humphries, says the result is critically important.
"We've averted a significant catastrophe potentially and common sense has prevailed," he said.
Mr Humphries says Pacific National has also agreed to spend $70 million given under the broadacre agreement upgrading locomotives.
"The $70 million left after Pacific National have spent $40 million on rolling stock will be an upgrade of rolling stock to run good trains on the good lines," he said.
"There will be probably $20-odd million to go into a buyback of the 48 class trains and wagons that will be then rediverted to the branch lines, and probably $10-odd million will be set aside to keep Pacific National in the game of the rolling stock till at least after this harvest."
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They also get to dump all the tired locos and wagons they don't want on the gov plus get $10mill for wagon maintenance as well? Where does this stop? We can hold the country to ransom because we can't make money doing it the way we are running our company so the gov will prop us up. Was there a point to privatisation?
How do I get in on this? I want to start a useless rail company and get handouts because we are incompetent.
Mate, if that loco pulls as hard as you do, it'd move anything.
I'd still rather have an ALCo.
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