Tuesday 24 July 2018 by FIIG Research Company updates

Company updates – Aurizon, Mackay Sugar, NCIG, NRW

This week, Aurizon agreement challenged by ACCC with potential impact on SCT, Mackay Sugar strikes deal to sell mill, NRW secures new contract, NCIG issues new DirectBond

Aurizon agreement challenged by ACCC, potential impact on SCT

On 14 August 2017, Aurizon announced the exit of its intermodal business. This followed a review of its legacy business which has been underperforming with significant losses, on a modest customer base, for many years. According to Aurizon, it was sub scale and a third player in the most profitable east-west market.

Aurizon entered into a binding agreement with a consortium of Pacific National (PN) and Linfox to sell its Queensland intermodal business. Aurizon has also signed a binding agreement with PN to sell the Acacia Ridge intermodal terminal.

The transaction, now challenged by the ACCC, may not proceed.

Our view of the proposed transaction is that competition would ease, reducing downward pressure on margins. However, we also note that Pacific National’s market share would increase.

SCT has no reliance on the assets forming part of the agreements.

Mackay Sugar enters agreement to sell Mossman Mill to growers

Mackay Sugar (MSL, Company) has announced it has entered into an agreement to sell its Mossman mill to an entity controlled by Mossman and Tablelands growers. The sale of this mill was originally highlighted as a funding option as part of the Kidder Williams consultation on capital management options for the Company.

MSL’s Board and management initially met with Mossman and Tablelands Canegrower and Australian Cane Farmers Association members in early 2017 in relation to a potential sale.

The Mossman Mill has generally been marginally profitable, however after capital expenditure, it is cashflow negative.

The consideration for the mill was stated as being “nominal”, however if the transaction proceeds, it will improve MSL’s cashflow.

Please refer to MSL’s website for the full release.

Newcastle Coal Infrastructure Group issues new DirectBond

The NICG USD 4.40% September 2027 senior secured bonds have been added to the DirectBond list for wholesale investors at a yield to worst of 5.04%pa. The bonds are rated by S&P Global as BBB. Click here for the Factsheet.

NCIGH, the holding company of NCIG, is owned by six coal mining company shareholders. NCIG holds the long term lease on the NCIG coal export terminal at the Port of Newcastle.

NCIG was formed in 2004 by four coal producers in the NSW coalfields that won the right to build and operate a new terminal in Newcastle in August 2005. The terminal has been developed in stages and currently has a nameplate capacity of 66 million tons per annum.

The shippers are producers with substantial coal reserves in the Newcastle, Hunter Valley, Gunnedah and Western coalfields. The high quality and low cost characteristics of thermal coal from the area supports the global export demand for thermal coal in the region.

NRW secures new contract

On 18 July 2018, NRW Holdings released an ASX Announcement that BHP Iron Ore has awarded the company the contract for Bulk Earthworks and Concrete Works at the South Flank Precinct project.

The contract is valued at approximately AUD176m and is expected to run for 15 months commencing September 2018. NRW is performing very strongly and in advance of our forecasts. After winning a number of contracts, NRW’s order book is now at near record levels of AUD2.05bn, as of end May 2018. Equity is up 253% over the last 12 months. 

The NRW AUD 7.50% December 2020 bond is available to all investors at yield to worst of 5.27%pa.

Updated Factsheets

Here is a list of all recently updated Factsheets available to all investors.


  • Aviation Training Investments AUD 40M 7.50% 13 November 2020 senior unsecured. View Factsheet
  • Moneytech Finance AUD 25M BBSW +4.65% 17 April 2022 subordinated. View Factsheet


  • Auswide Bank AUD 3M BBSW +4.80% 17 Jun 2026 subordinated Tier 2. View Factsheet
  • Auswide Bank AUD 3M BBSW +4.25% 12 Jun 2024 subordinated Tier 2. View Factsheet
  • Newcastle Coal Infrastructure Group USD 4.40% 29 Sep 2027 senior secured notes. View Factsheet.

Please note yields are accurate as of 24 July 2018, subject to change. S&P ratings are shown.