Initial bids for Glencore’s Hunter Valley rolling stock and haulage assets are rolling in.
Three major logistics companies – Aurizon, Pacific National, and Genesee Wyoming – are understood to have begun placing bids for the assets earlier this week, according to the AFR.
While a price is yet to be fixed for the sale, it is believed the assets – generated approximately $100 million EBITDA last year, and over the last few years has had revenues around $160 million annually – are valued in the one billion dollar range.
Glencore’s asset sale is part of the miner’s wider plan to pay down billions in debt.
According to the miner, the potential sale of the assets (GRail) “is in response to a strong global demand for high quality infrastructure assets and forms part of Glencore’s wider global debt reduction program”.
Glencore initially set up GRail in 2010 in response to what it believed were high levels of access and cost from existing coal haulage operators in the Hunter Valley.
Since that time it has reportedly grown to become the third largest coal haulage business in Australia, hauling around 51 million tonnes last year.
According to a source close to the matter, Glencore’s coal will likely be hauled by the new owner of the rail assets, although it is understood the details of the coal movement will be discussed in the new agreements.
While the locomotives, wagons, and support equipment are understood to be part of the potential deal, Glencore’s refuelling stations – located on its mines – will not be part of the sale.