Anchorage picks up CF for $250m

Anchorage Capital Partners has finalised a deal to buy distressed transport company CF Asia Pacific for a price understood to equate to about $250m.

The buyout fund snapped up the operation with the transaction finalised on Wednesday after it remained in talks with its lenders.

The price is a far cry from the initial $700m the company was reportedly selling for.

Apparently the acquisition involved various moving parts but equates to a value of about $250m.

CF Asia Pacific’s problems stem from the Australian drought, which is understood to have prompted the move by owner Sasser Family Holdings to put the business on offer.

Deutsche Bank had been working with CF Asia Pacific for some time.

Based in Sydney, CF Asia Pacific provides leased trains and rolling stock assets to the Australian rail industry, along with maintenance and modification.

It also offers build and rebuild solutions for Australia’s rail operators and shippers.

The business was established in response to the privatisation of former state-based railways. It is controlled by the US-based Sasser Family which owns the Chicago Freight Car Leasing Company and has grown its transportation empire globally since 1928.

While the group is heavily exposed to the agriculture industry that transports grains, it also has a presence in the infrastructure and intermodal markets, along with the mining industry.

It is understood that CF Asia Pacific’s senior lenders include the Commonwealth Bank and other Australian banks that are owed about $100m, but challenges have existed with its subordinated lenders, which are owed less.

For the 2018 financial year, CF Asia Pacific generated $58.9m annual revenue as it sank $29.6m into the red, with finance costs weighing on its bottom line.

CF Asia Pacific’s total borrowings during fiscal 2018 were $235.66m, while net debt was $235m and total equity $114.6m.