Main ports say no to stake in Tranz Rail

By DANIEL RIORDAN

Ports of Auckland and Port of Tauranga say they are not interested in becoming Tranz Rail shareholders.

Ports of Auckland chief executive Geoff Vazey says his company, owned 80 per cent by Infrastructure Auckland, has no desire to own all or part of Tranz Rail.

"We're not interested at all. If you buy a piece of Tranz Rail you get a piece of all of it, and the parts that dovetail with us are not big parts."

Mr Vazey said the port company supported Tranz Rail's restructuring plans.

"More emphasis on container freight, more emphasis on long haul - we think it makes a lot of sense."

Ports of Auckland's biggest competitor, Port of Tauranga, "is not currently interested," said chief executive Jon Mayson. "We made that clear to [sale advisers] Deutsche Bank some weeks ago."

Tranz Rail's two biggest shareholders, Wisconsin Central (24 per cent) and Fay Richwhite (14 per cent), on Friday signalled their intention to sell their stakes, although Deutsche Bank had been testing the waters for Fay Richwhite's stake for some months.

Local interest in the combined 38 per cent, worth $161 million at yesterday's share price of $3.50 but likely to command a premium for control, is expected to come from consortiums of port companies, freight forwarders and shipping firms, with Tranz Rail's 7 per cent shareholder, investment company Infratil, a potential key player. Necessary rail expertise would have to come from overseas.

Owens Group chief executive Ian Newman said any significant transport operator would be interested in being a part of a development that smelled of a break-up or the possibility of taking an interest in Tranz Rail.

His company had already expressed interest in Tranz Rail's divestment programme and might also be interested in owning a piece of the whole company. "I think we would have to seriously consider it."

Mainfreight's New Zealand managing director, Don Braid, was giving nothing away.

"I don't think it's pertinent to comment in the media about any possible transaction. That would be between us and Tranz Rail, if indeed we're interested."

Port companies outside Auckland and Tauranga are not exactly putting up their hands.

South Port, Lyttelton and Napier all say they are waiting to see what unfolds.

But French multinational Transdev, which is investigating the Auckland and Wellington commuter rail services being sold by Tranz Rail, is interested in taking a closer look at the 38 per cent stake.

The latest to declare its interest in Tranz Rail's divestment programme is bus company Guthreys Coachlines, which says it is looking for an overseas partner interested in taking over the long-distance part of Tranz Rail's network. Guthreys already operates a bus link with Tranz Rail.

In 1992, when the Government decided to sell what was then NZ Rail, bidders on the short-list are believed to have included New York-based multinational Sea Containers, a Ports of Wellington/Sofrana consortium, a Ports of Tauranga/Lyttelton Pacifica consortium, Freightways/Noel Group and Mainfreight.

Three serious bids were received, from a combined ports consortium, the Alan Gibbs-controlled Freightways and Wisconsin Central.

The sale adviser was Bankers Trust.

Eight years later, some of the original bidders are back in the frame.

Sea Containers, which is listed on the New York Stock Exchange, has already been approached by Deutsche Bank to gauge its interest. The company's Australasian managing director, Ian Routledge, said it had yet to make a decision about Tranz Rail.

The multinational's operations include railway and ferry companies, hotels and marine container leasing.