Re: Genesee & Wyoming / Westrail sale

[Tell <just@hate.spammers.com>]

Thanks Mark.  Very interesting.

Neither major political parties in Australia have any
idea what rail is all about.

So I guess it is up to private Oz and Yank interests to
keep as much tonnage on rail as possible.

....Tell



>"Mark Bau" <mbauco@earthlink.net> wrote:

> Australian Railroad Group Closes Acquisition of Westrail Freight;Genesee &
> Wyoming Inc. Completes Private Placementof Convertible Preferred Stock
> 
> 
> GREENWICH, Conn., Dec. 18 /PRNewswire/ -- Genesee & Wyoming Inc. (GWI) 
> (Nasdaq: <A HREF="aol://4785:GNWR">GNWR</A>) announced today that its joint
> venture, Australian Railroad Group Pty Ltd (ARG), has completed the
> acquisition of Westrail Freight from the government of Western Australia for
> approximately $323 million including working capital and acquisition costs.
> ARG is a joint venture owned 50% by GWI and 50% by Wesfarmers Limited, a
> public corporation based in Perth, Western Australia.  Westrail Freight is
> composed of the freight operations of the formerly state-owned railroad of
> Western Australia.  To complete the acquisition, GWI contributed Australia
> Southern Railroad (ASR) to ARG along with GWI's interest in the Asia Pacific
> Transport Consortium (APTC) -- a consortium selected to construct and
> operate
> the Alice Springs to Darwin railway line in the Northern Territory of
> Australia.  APTC is currently expected to reach financial close in early
> 2001.
> 
> ARG is now the largest private rail operator in Australia with its combined
> freight operations, including those of ASR and Westrail, serving the western
> half of the Australian continent.  For the twelve months ended June 30,
> 2000,
> ARG had pro forma revenue of approximately $184 million and pro forma EBITDA
> of approximately $57 million.  ARG has appointed Charles W. Chabot,
> previously Senior Vice President of ASR, as Chief Executive Officer, and
> Murray Vitlich, previously General Manager of a major forest products unit
> of
> Wesfarmers, as Chief Financial Officer.  GWI will account for its 50%
> ownership in ARG under the equity method of accounting and will therefore be
> deconsolidating ASR from its consolidated financial statements. GWI's
> financial results for the fourth quarter of 2000 will include its equity
> interest in the earnings of ARG and the deconsolidation of ASR for the final
> 15 days of December 2000.
> 
> In addition to the contribution of ASR and APTC to ARG, GWI contributed $19
> million of cash while Wesfarmers contributed $62 million of cash.  ARG also
> received $249 million in acquisition debt and $65 million in construction
> and
> working capital facilities from Bank of America and the Australia and New
> Zealand Banking Group Limited (ANZ), a portion of which was used to
> refinance
> approximately $7.0 million in debt at ASR.  ARG was advised on the
> acquisition of Westrail Freight by Credit Suisse First Boston. 
> 
> To fund its cash investment in Westrail Freight, GWI also announced today
> that the Company has completed its previously announced private placement of
> Convertible Preferred Stock (the Convertible Preferred) with the 1818 Fund
> III, L.P. (the Fund) managed by Brown Brothers Harriman & Co.  GWI exercised
> its option to fund $20.0 million of a possible $25.0 million in gross
> proceeds from the Convertible Preferred.  The Fund will also receive an
> option to invest an additional $5.0 million in GWI provided that the Company
> completes future acquisitions with an aggregate purchase price greater than
> $25.0 million. The Convertible Preferred has a conversion price of $23.00
> per share, a cash coupon of 4.0%, is callable by GWI in four years, and is
> mandatorily redeemable in eight years. The Convertible Preferred has not
> been registered under the Securities Act of 1933, as amended, and may not be
> offered or sold in the United States absent registration or applicable 
> exemption from registration requirements.
> 
> Brown Brothers Harriman & Co. is the oldest and largest private bank in
> America and is based in New York, New York.  The 1818 Funds, a family of
> private equity partnerships managed by Brown Brothers Harriman, provide
> growth equity capital to leading entrepreneurial companies.
> 
> Wesfarmers is a public company listed on the Australian Stock Exchange with
> a
> market capitalization of approximately $2.0 billion and annual revenues of
> approximately $1.8 billion.  Its major businesses include energy (coal and
> gas), fertilizers and chemicals, rural merchandising, insurance and
> financial
> services, forest products, and transportation. Wesfarmers is based in Perth,
> Western Australia.
> 
> GWI is a leading operator of short line and regional freight railroads in
> the
> United States, Canada, Australia, Mexico and Bolivia, and provides freight
> car switching and related services to industrial companies that have
> extensive railroad facilities within their complexes.  The Company today
> operates in five countries on three continents over 7,700 miles of owned and
> leased track. It also operates over an additional 2,350 miles under track
> access arrangements.  In October 2000, the Company was ranked 99th on Forbes
> magazine's list of the 200 best small companies in America.
> 
> This press release contains forward-looking statements regarding future
> events and the future performance of Genesee & Wyoming Inc. that involve
> risks and uncertainties that could cause actual results to differ materially
> including, but not limited to, economic conditions, customer demand,
> increased competition in relevant markets, and others. We refer you to the
> documents that Genesee & Wyoming Inc. files from time to time with the 
> Securities and Exchange Commission, such as the Company's Forms 10-Q and
> 10-K
> which contain additional important factors that could cause its actual 
> results to differ from its current expectations and from the forward-looking
> statements contained in this press release.  All monetary references are in
> US dollars and are based on current exchange rates.
> 
> SOURCE Genesee & Wyoming Inc.