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This morning we have released our FY2017 results to the market including an announcement on the future of our Intermodal business.
Details of today’s announcement related to Intermodal are:
• Aurizon has signed a binding agreement to sell its Queensland Intermodal business to a consortium of Linfox and Pacific National. The transaction includes the transfer of approximately 350 employee positions as well as assets and commercial and operational arrangements to the Linfox and Pacific National consortium.
• Separately Aurizon has signed a binding agreement with Pacific National to sell its Acacia Ridge Intermodal Terminal. That transaction includes the transfer of approximately 30 employee positions, as well as assets and commercial and operational arrangements. It is also subject to approval by the Australian Competition & Consumer Commission and the Foreign Investment & Review Board.
• Aurizon is aiming to finalise the transactions by the end of FY2018, subject to approval from the Australian Competition & Consumer Commission and approval from the Foreign Investment & Review Board.
• Approximately 350 Aurizon employees in Queensland Intermodal will transfer to the Pacific National and Linfox consortium, and 30 employees at the Acacia Ridge terminal will transfer to Pacific National. Related rollingstock and assets will transfer with the business as an ongoing concern. Consultation will commence today with affected employees.
• Aurizon will exit the Intermodal market, and close the remainder of its national intermodal business outside of Queensland. Aurizon will cascade rollingstock to other parts of its business where appropriate.
• A consultation process, including respective redundancy and entitlements provisions, will commence with the 250 employees impacted by the closure of the interstate business. There may be opportunities for redeployment.
As you are aware we have been looking closely at the future of our Intermodal business as part of our Freight Review.
Unfortunately, over the years we have continued to see significant financial losses in this part of the business.
The reality is that in a market serviced by a number of well-established transport providers, we have been unsuccessful in establishing a significant scale and customer base to make it profitable.
Exiting the Intermodal business is clearly not a decision we have taken lightly but one we had to make if we are to provide certainty and value for our shareholders.
There is now a clear plan for the divestment and closure of Intermodal, and looking forward, our Company will focus on opportunities and market segments that best fit with our core strengths and capabilities.
We understand these decisions will be difficult for affected employees and local leadership who have worked very hard to create a viable business.
I also acknowledge the efforts of Andy Jakab and his senior leadership team in driving business improvements in recent months. They will guide the transition for the Queensland and Acacia Ridge sale and the interstate closure, with a focus on supporting employees and maintaining safety and customer service levels.
Andy and his team will be communicating in more detail with affected employees in Intermodal today and over coming months as we work through the process.
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