Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Tranz Scenic Sale Confirmed

For Immediate Release 30 November, 2001

Tranz Scenic Sale Confirmed

Tranz Rail today announced the signing of contracts for the $33 million sale of its Tranz Scenic operations to Australian-based West Coast Railway operators Don Gibson and Gary McDonald.

Details of the sale were finalised today with the transaction completing a further step in Tranz Rail's strategic plan to concentrate on freight services. A new company will be formed to run the Tranz Scenic business and will assume responsibility for the operation from mid December.

"Following on from the $81 million agreement to sell Tranz Metro Auckland, we are now well down the track of divesting passenger operations to allow us to concentrate on our core freight business," said Tranz Rail Managing Director, Michael Beard.

"West Coast Railway is a specialist passenger service operator with the marketing and management expertise to gain the best returns and provide the best service possible on the current Tranz Scenic routes," said Mr Beard.

West Coast Railway Director Don Gibson said he expects to build on the existing tourism success of Tranz Scenic and to look at developing new routes.

"The Tranz Alpine route has experienced growth of 30% in the past five years and passenger booking numbers remain strong despite current world events. The demand on scenic tourism routes is growing and we expect that to continue."

Under the agreement Tranz Rail and West Coast Railways' shareholders Gibson and McDonald are 50-50 partners in the new company. The new company will manage and operate the five Tranz Scenic routes it has purchased and will own all of Tranz rail's long distance, passenger rolling stock.

Both partners will contribute $5 million in equity into the new company with the ASB Bank providing additional finance.

The new company has purchased the Northerner and Overlander between Auckland and Wellington, the TranzCoastal service between Picton and Christchurch and the TranzAlpine, which runs over the Southern Alps between Christchurch and Greymouth. Also acquired is the Capital Connection long-distance commuter service between Wellington and Palmerston North and Tranz Scenic's charter business.

Assets include 13 operating, mainline locomotives, nine other locomotives, 76 carriages, 3 railcar sets, 16 power or observation vans, brands, selected station buildings around the country and carriage maintenance depots in Christchurch and Otahuhu.

Mr Beard said Tranz Rail sees additional value for Tranz Rail in maintaining an interest in the new passenger operations while drawing on the benefits of having those operations managed by a specialist passenger transport operator.

"Our new partners operate passenger train services in Victoria and we have always seen additional benefits from a long-distance passenger service run by a specialist operator. We have decided to retain a positive financial investment in the new holding company. We will not play an active role in its management but our continued involvement will ensure effective co-ordination on issues such as track access. Tranz Rail will also have representatives on the Board."

No disruptions for passengers are expected over the busy holiday period, as the same staff will be involved in the day to day running of the business.

Existing Tranz Scenic staff will be offered positions with the new company and will be seconded to the new operation under the current agreement until new employment contracts are in place.

Tranz Rail will also continue to operate The Southerner service between Invercargill and Christchurch until the agreement with Central and Local Government expires on February 10. Rolling stock for The Southerner would be handed over to the new owners at that point. Mr Beard said any discussions on the future of that service would depend on the outcome of the current viability study.

Mr Beard said proceeds from the sale would be used to retire Tranz Rail Limited debt.

-ends-


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news