NZ Government proposes partial buy-back of Tranz Rail

Tranz Rail Holdings Limited (TRH) and the New Zealand Government signed heads of agreement on a joint plan for restructuring and developing the New Zealand railway system. 

 

The proposal is conditional on approval by TRH shareholders.

 

Under the terms of the agreement announced on June 6, the Government would pay about $75.8 million to acquire a 35% interest in TRH in the form of new shares to be issued at a price of 67c per share. After the share issue, the Government would be entitled to elect three of the seven directors on the TRH Board of directors.

 

The Government would also buy back the rail track, associated land lease, yards, terminals and control systems from TRH for $1 and other land, property and leases surplus to TRH requirements for about $50 million, subject to final valuations.