Rail greats back in Aussie hands
Allegro Funds has acquired the company behind luxury train services The Ghan and The Indian Pacific from British giant Serco.
Allegro is a Sydney-based private equity fund manager investing in private mid-market businesses within Australia and New Zealand.
Allegro founding partner and managing director Adrian Loader said there were already strong opportunities in luxury end travel and this has been further boosted by the drop in the Australian dollar, which gives overseas tourists better spending power and makes domestic travel more appealing to Australians compared with the cost of overseas travel.
Mr Loader said about 25 per cent of passengers on The Ghan, which travels from Adelaide to Darwin, and The Indian Pacific, which goes from Sydney to Perth, were from overseas.
The decision to sell followed a review of what Serco called its “non-core assets” and speculation that GSR had been a financial disaster for the British company.
Revenues at Great Southern Rail are around $100 million annually. The number of higher-end luxury travellers had been growing and there were plans to add more carriages to The Ghan and The Indian Pacific to take advantage of improved demand.
Mr Loader said he didn’t want to give an exact price tag but he did say it was “below $20 million”. He said there would be no job losses as a result of the acquisition.
It is the second transport-related acquisition made by Allegro in the past seven months, with the firm having bought bus manufacturer Custom Coaches in August 2014 after it hit financial strife and was placed in administration. Customer Coaches operates a bus body manufacturing factory at Villawood in Sydney.
The GSR head office will remain in Adelaide. Allegro also owns Discovery Parks which is headquartered in South Australia and owns more than 30 caravan parks across Australia. Great Southern Rail’s chief executive officer Chris Tallent is staying on.
GSR was privatised in late 1997 and was bought by a consortium including Serco, Macquarie Bank and a range of other investors. Serco bought out its partners in 1999.
