Price to sell Aurizon's East Coast Rail unit is higher than expected - RBC

Aurizon Holdings

16/12/2022 03:01

(Updates)
    ** Shares of Australia's Aurizon Holdings Ltd  AZJ.AX  rise
as much as 4.3% to A$3.88 - set for best day since March 3, if
gains hold
    ** The country's largest rail freight operator says it will
sell its East Coast Rail business (ECR) to Magnetic Rail Group
Pty for A$425 mln ($284.71 mln) in cash
    ** Analysts at RBC say trade sale is a better result for AZJ
shareholders than a demerger
    ** The sale valuation is much better than the A$795 mln that
we had assumed in our valuation, so overall the price looks
supportive - RBC
        ** Co says it is not expected to make any capital tax
gains, with A$125 mln of the proceeds to be deferred for 12
months
  
    ** AZJ says positive earnings contribution from sale of ECR
is expected to be more than offset by transaction costs, among
others
    ** Aurizon shares hit highest level since Dec. 1
    ** Stock up ~6.6% so far this year, as of last close
 (Reporting by Upasana Singh and Poonam Behura in Bengaluru)
 ((Upasana.Singh@thomsonreuters.com;))