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FreightLink, disappointed at the ill-fated bid, has gone into receivership. (Image courtesy of FreightLink)
FreightLink has gone into voluntary receivership after failing to garner the required consents to sell the business.
The owner and operator of the $1 billion Adelaide-Darwin railway, has appointed corporate recovery firm KordaMentha as its voluntary administrator.
Heavily indebted, the company was put up for sale in May, backed by the company’s senior banks.
The company named a preferred bidder in September, but the transaction was blocked by a small group of ‘mezzanine’ debt holders who were against the deal.
“This minority group had requested that senior banks make some contribution to the mezzanine debt holders,” the company said.
“This was not acceptable to the senior banks as the offer from the preferred bidder was well in excess of the senior debt.”
FreightLink chairman Malcolm Kinnaird said the board was very disappointed at the thwarted bid, which had been approved by all shareholders and a majority of mezzanine debt holders.
“I would like to acknowledge the shareholders, senior banks and the mezzanine debt holders who supported the sale process and all those, particularly our customers, who have contributed and will continue to contribute to FreightLink’s operational success.” Mr Kinnaird said.
He said the business continued to grow strongly, with its operating EBITDA reaching $28.6 million last year, up 73 per cent on the preceding year.
While the company had incurred considerable debt during the construction phase, he said the railway was operating successfully, attracting 90 per cent of general freight between Adelaide and Darwin to rail.
“The construction of the new railway has generated significant economic benefits for the NT and SA and has been instrumental in helping to establish a viable mining industry along the railway corridor, providing the means to transport minerals cost effectively for export overseas,” he said.
Mr Kinnaird said the outlook for the business under a more appropriate capital structure was positive and business operations would continue as usual.
The company said the receivers and managers would now pursue a sale process, with no impact on customers.