NRMA part of Quadrant’s Ghan, Indian Pacific exit plan?

The Ghan near the MacDonnell Ranges. Picture: Supplied

Quadrant Private Equity is said to have been in recent advanced talks with a party to sell its tourism business Journey Beyond, according to sources.

Discussions with a group are said to have been ongoing for some time, sources have said.

However, Quadrant said that no current sales talks were taking place amid the currently challenging environment, with the focus on getting the business back up and running.

The suitor involved is understood to be a strategic player, rather than a private equity fund, leaving some to question whether the National Roads and Motorists Association is closing in on the business that owns the luxury passenger train service The Ghan.

Last year, Jefferies was hired to sell the tourism operator, but that was well before the COVID-19 crisis.

Since then, the global pandemic has hit the tourism industry the hardest of all, with travel suspended to curb the spread of the virus.

Quadrant owns businesses across various sectors hard hit by COVID-19, including the gyms business Fitness and Lifestyle Group and restaurant chain Rockpool, but sources close to the fund say that it has been drawing down liquidity lines to ensure the survival of those operations and had “plenty of dry powder”.

Expectations are that international travel will not return for some time, although domestic travel could resume in weeks, with some expecting a boom on the local tourism scene in about a year.

Journey Beyond was formed when Quadrant purchased Great Southern Rail and later the Cruise Whitsundays and Rottnest Express marine tourism businesses.

Before COVID-19, it was thought to generate about $40m of annual earnings before interest, tax, depreciation and amortisation and could fetch a price of at least $400m.

It owns well known The Ghan railway – an abbreviated version of its previous nickname, The Afghan Express – which runs through Australia’s Red Centre between Adelaide and Darwin and stops at Alice Springs. The 54-hour journey has proved to be popular among tourists.

In addition to The Ghan, Journey Beyond’s assets include the Indian Pacific rail between Sydney and Perth, Cruise Whitsundays marine operator, Darwin Harbour Cruises, West Australian safari camp Sal Salis, Eureka Skydeck Melbourne, Horizontal Falls Seaplane Adventures and the Rottnest Express cruise company, which operates daily and annually from Perth and Fremantle to Rottnest Island and the Swan River.

The NRMA is understood to have an appetite for rail assets, which would make Journey Beyond’s Great Southern Rail operation — including The Ghan and The Indian Pacific rail experience — attractive.

However, the thinking is the NRMA would shy away from Journey Beyond’s marine and Melbourne-based Eureka Skydeck assets.