Australia's Aurizon in Talks to Buy Debt-Saddled Coal Port

Published in

Australian coal rail operator Aurizon Holdings said on Monday it was in talks to buy the Wiggins Island Coal Export Terminal (WICET), which urgently needs to restructure $3 billion in debt, the International New York Times reported on a Reuters story. A purchase would mark a change in strategy under new Chief Executive Andrew Harding for Australia's largest rail freight operator, which runs nearly 2,700 kms (1,680 miles) of rail lines transporting millions of tonnes of coal a year. A successful deal would also be a relief for mining giant Glencore and four partners who face a September 2018 deadline to start paying down the debt on the world's most expensive coal port. "It is strategically sensible for Aurizon to be considering the acquisition of WICET," said Morgans Stockbroking analyst Nathan Lead. "It's already providing the rail logistics into the terminal, so an acquisition would be a vertical integration play." Aurizon said it was in preliminary discussions with undisclosed parties for a deal that would see it acquire the coal terminal, while "other consortium members" would acquire one or more of the coal mines that use the port. Read more. (Subscription required.)