Tranz Rail may have new suitor

By DANIEL RIORDAN transport writer

Australian transport group Lang Corporation, in aggressive expansion mode, is being touted as a potential buyer of a 38 per cent stake in Tranz Rail.

Several broking sources said Lang was showing interest in the stake, made up of Fay Richwhite's 14 per cent holding and Wisconsin Central's 24 per cent stake. The pair put the stake on the market in November.

Montreal's Canadian National Railway said last month that it was buying Wisconsin for $US1.2 billion ($2.8 billion), picking up Wisconsin's share in Tranz Rail in the process. The Canadian company is even keener than Wisconsin to sell.

Lang managing director Chris Corrigan on Tuesday outlined a range of growth opportunities for the company, which has a war chest of $A400 million ($500 million) for acquisitions with more than that in reserve.

He said the company might bid for Australia's National Rail and/or Freightcorp, either alone or in a consortium. Alternatively, "one area that we could look at is whether we just build a rail business ourselves and leave some of the difficulties of the existing system for someone else to sort out. It's all a question really of price and of when those assets become available."

Sydney-based Lang has just raised $A194 million ($242 million) in a private placement and is raising $A209 million ($261 million) in a rights issue. It has access to a further $A500 million ($625 million) in debt facilities.

Listed on the Australian Stock Exchange, the company made a net operating profit of $A58 million ($72 million) last year on turnover of $A583 million ($728 million).

Its focus is on stevedoring and port-related transport logistics throughout Australia.

Lang's businesses include Patrick Stevedores, Patrick Rail, Patrick Autocare, Patrick Port Services, Holyman Cargolink and Liberty Cargo Handling Systems.

Lang spokeswoman Felicity Moffatt said Mr Corrigan had made no firm commitments but had said the company would consider "a range of opportunities that may fit with its business if they are of sufficient scale."

She said any opportunities in New Zealand were more likely to be in stevedoring than rail.

Tranz Rail's share price closed 15c higher on Friday at $3.80. At that price, a 38 per cent stake is worth $175 million.