Exhibit 99.1
Australian Railroad Group Closes Acquisition of Westrail Freight;
Genesee & Wyoming Inc. Completes Private Placement of Convertible Preferred
Stock
GREENWICH, Conn., December 18/PRNewswire/ -- Genesee & Wyoming Inc.
(GWI announced today that its joint venture, Australian Railroad Group Pty Ltd
(ARG), has completed the acquisition of Westrail Freight from the government
of Western Australia for approximately $323 million including working capital
and acquisition costs. ARG is a joint venture owned 50% by GWI and 50% by
Wesfarmers Limited, a public corporation based in Perth, Western Australia.
Westrail Freight is composed of the freight operations of the formerly
state-owned railroad of Western Australia. To complete the acquisition, GWI
contributed Australia Southern Railroad (ASR) to ARG along with GWI's
interest in the Asia Pacific Transport Consortium (APTC) -a consortium
selected to construct and operate the Alice Springs to Darwin railway line in
the Northern Territory of Australia. APTC is currently expected to reach
financial close in early 2001.
ARG is now the largest private rail operator in Australia with its
combined freight operations, including those of ASR and Westrail, serving the
western half of the Australian continent. For the twelve months ended June
30, 2000, ARG had pro forma revenue of approximately $184 million and pro
forma EBITDA of approximately $57 million. ARG has appointed Charles W.
Chabot, previously Senior Vice President of ASR, as Chief Executive Officer,
and Murray Vitlich, previously General Manager of a major forest products
unit of Wesfarmers, as Chief Financial Officer. GWI will account for its 50%
ownership in ARG under the equity method of accounting and will therefore be
deconsolidating ASR from its consolidated financial statements. GWI's
financial results for the fourth quarter of 2000 will include its equity
interest in the earnings of ARG and the deconsolidation of ASR for the final
15 days of December 2000.
In addition to the contribution of ASR and APTC to ARG, GWI
contributed $19 million of cash while Wesfarmers contributed $62 million of
cash. ARG also received $249 million in acquisition debt and $65 million in
construction and working capital facilities from Bank of America and the
Australia and New Zealand Banking Group Limited (ANZ), a portion of which was
used to refinance approximately $7.0 million in debt at ASR. ARG was advised
on the acquisition of Westrail Freight by Credit Suisse First Boston.
To fund its cash investment in Westrail Freight, GWI also announced
today that the Company has completed its previously announced private
placement of Convertible Preferred Stock (the Convertible Preferred) with the
1818 Fund III, L.P. (the Fund) managed by Brown Brothers Harriman & Co. GWI
exercised its option to fund $20.0 million of a possible $25.0 million in
gross proceeds from the Convertible Preferred. The Fund will also receive an
option to invest an additional $5.0 million in GWI provided that the Company
completes future acquisitions with an aggregate purchase price greater than
$25.0 million. The Convertible Preferred has a conversion price of $23.00
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per share, a cash coupon of 4.0%, is callable by GWI in four years, and is
mandatorily redeemable in eight years. The Convertible Preferred has not
been registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or applicable
exemption from registration requirements.
Brown Brothers Harriman & Co. is the oldest and largest private
bank in America and is based in New York, New York. The 1818 Funds, a family
of private equity partnerships managed by Brown Brothers Harriman, provide
growth equity capital to leading entrepreneurial companies.
Wesfarmers is a public company listed on the Australian Stock
Exchange with a market capitalization of approximately $2.0 billion and
annual revenues of approximately $1.8 billion. Its major businesses include
energy (coal and gas), fertilizers and chemicals, rural merchandising,
insurance and financial services, forest products, and transportation.
Wesfarmers is based in Perth, Western Australia.
GWI is a leading operator of short line and regional freight
railroads in the United States, Canada, Australia, Mexico and Bolivia, and
provides freight car switching and related services to industrial companies
that have extensive railroad facilities within their complexes. The Company
today operates in five countries on three continents over 7,700 miles of
owned and leased track. It also operates over an additional 2,350 miles
under track access arrangements. In October 2000, the Company was ranked
99th on Forbes magazine's list of the 200 best small companies in America.
This press release contains forward-looking statements regarding
future events and the future performance of Genesee & Wyoming Inc. that
involve risks and uncertainties that could cause actual results to differ
materially including, but not limited to, economic conditions, customer
demand, increased competition in relevant markets, and others. We refer you
to the documents that Genesee & Wyoming Inc. files from time to time with the
Securities and Exchange Commission, such as the Company's Forms 10-Q and 10-K
which contain additional important factors that could cause its actual
results to differ from its current expectations and from the forward-looking
statements contained in this press release. All monetary references are in
US dollars and are based on current exchange rates.
SOURCE Genesee & Wyoming Inc. 12/18/2000
/CONTACT: John C. Hellmann, Chief Financial Officer, Genesee & Wyoming
Inc., 203-629-3722/
/Web site: http://www.gwrr.com/
(GNWR)
