Toll Group to operate railway in Cambodia

The Business Times
http://www.businesstimes.com.sg/

It also acquires holding company of feeder operator Perkins Shipping

By VINCENT WEE
Published June 18, 2009

(SINGAPORE) Australian logistics provider Toll Group is building up its capabilities in Asia. It has sealed a 30-year concession to operate Cambodia's railways and has acquired Perkins Group Holdings, the parent of Perkins Shipping Group, which provides services between Darwin and north Australian ports and Singapore.

In Cambodia, a joint venture between Toll (55 per cent) and Cambodian conglomerate Royal Group (45 per cent) will become the operator of the Cambodian rail network and related freight logistics.

'This agreement complements Toll's existing presence in Cambodia through its oil and gas logistics operation,' said Toll managing director Paul Little. 'As the operator of the railways, we now have a strong strategic partnership with the government of Cambodia that will see future benefits for Toll and the Cambodian people.'

Mr Little said that the agreement is conditional upon confirmation of US$145 million of investment by the international community to upgrade the rail network and develop a modern inter-modal facility on 98 hectares in Phnom Penh, for which principal funding has been committed by the Asian Development Bank.

'Over time, the Cambodian railways are likely to become a vital part of the planned rail link between Singapore and China, which will include Thailand, Malaysia, Cambodia and Vietnam,' Mr Little said. 'As the long-term operator of the Cambodian railways through its involvement in the joint venture, the Toll Group will be excellently placed if the planned expansion occurs.'

To complete the loop on the sea side, Toll clearly has its eye on the growing economies of South-east Asia with its Perkins acquisition. 'The increasing importance of South-east Asian trade to northern Australia reinforces the future prospects for organic growth of the Perkins' international shipping services linking Australia and Asia,' said Mr Little.

'Toll's internationally integrated service offering is already benefiting our Asian and Australian customers. With its potential for future regional growth, we are confident our customers will find Perkins Shipping a valuable addition to the Toll group.'

The acquisition, which will be funded from internal resources, is forecast to be EPS-accretive in year one. Toll did not disclose the value of either the Cambodia or Perkins deals.

'Toll's strong balance sheet and the group's exceptional existing businesses continue to provide the funding capacity and platform to acquire quality assets like Perkins Shipping despite current difficult economic times,' Mr Little said.

Perkins Shipping operates three small feeder ships that connect Australia with Singapore via Timor Leste, and four small ro-ro vessels on coastal services in northern Australia.