Abstract
Asciano Group, Australia' s largest ports and railways operator, revealed in
April this year that it was
considering takeover offers from a number of
unnamed bidders (according to The Australian newspaper).
BMI notes that in
March 2009, the company announced that it would consider offers for various
business
divisions as well as the company as a whole in an effort to
reduce the group' s debt burden - which is
reported to be US$4.78bn. The
company (whose subsidiaries include terminal operator, Patrick
Container
Ports, and freight railway, Pacific National Intermodal) announced on April 21
2009 that it
was considering proposals, thought to be non-binding, for a
' range of assets, together with a number of
proposals relating to
transactions that may result in a change of control and/or recapitalisation of
the
group' . The group declined to name any of the bidders, however.
Industry observers have suggested they
may include private equity firms,
Carlyle Group and TPG Capital among others, (again, according to
The
Australian). Asciano revealed in August 2008 that is had received a
joint-takeover offer from TPG
and Global Infrastructure Partners, which
valued the company at US$3.07bn. The bid was rejected on
the grounds that
it fell below Asciano' s valuation. BMI draws attention to the fact that the
company
recorded a net profit of US$32.44mn for the first half of the
financial year ending June 30 2009, and has
total assets of US$5.18bn.
However, as said, the company carries a high level of debt, reported at
US$4.78bn as of December 31 2008. This is due to mature between May 2009 and
May 2012, forcing it
to look to raise cash through the sale of assets.
Despite a number of positive fundamentals, BMI nevertheless expects the global
economic slowdown to
have an impact on the Australian freight sector.
Demand for some of the country' s key mineral and
agricultural exports
should ease back, and the pressure on its road, rail, and port systems should
reduce
during the course of 2009. According to our latest forecasts,
Australian GDP will fall by 1.4% this year,
and growth will average 1.9%
in the period of 2009-2013. We expect freight carried to grow by an annual
average of 2.6% during the five-year forecast period. The total value of
transport and communications
GDP will rise to US$63.9bn in nominal terms
by 2013, representing 5.7% of Australia' s GDP.
In advanced economies,
freight transport tends to grow at roughly the same pace as the economy as
a
whole. In Australia, however, we believe there is continuing upside
potential in the freight sector. This
reflects the size of the country' s
infrastructure development opportunities and the strong potential, once
the current recession has been negotiated, for the continuing growth of
mineral exports. Airfreight,
affected by the current downturn in the
global market, will see 3.3% average annual growth in freight
carried. We
now expect rail freight to grow by 2.5% per annum, with strong mining exports
and
infrastructure development coming into play after the current adverse
international conditions improve.
Road haulage freight carried will
achieve average annual growth of 2.4%, a figure that takes account of a
fairly slow 2009/10.
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