Nov 15 (BusinessDesk) - KiwiRail has failed to find a buyer for its unprofitable Hillside Workshops in Dunedin apart from the foundry operation, which it has conditional agreement to sell to ASX-listed manufacturer Bradken for an undisclosed sum.
The heavy lift facility at the 7.2 hectare Hillside site will now be operated by stat-owned KiwiRail’s freight business and other operations will be progressively closed down over the next few months as work is either completed or transferred to the Hutt Workshops.
“Despite a rigorous sales campaign there simply wasn’t a buyer out there for the whole operation,” chief executive Jim Quinn said in a statement. “This will be very difficult for our staff and although some will be transferred to Bradken or the KiwiRail Freight business, there will be redundancies.”
A spokeswoman for KiwiRail couldn’t say if the sale price would be made public. Bradken already has foundry operations in New Zealand and will continue to do some work under contract for KiwiRail.
There are currently 115 workers at Hillside.
The rail operator is on a drive to strip out $200 million in annual spending if it is to meet forecast earnings of $64.6 million by 2013.
Shares of Bradken fell 0.1 percent to A$4.55 on the ASX today, valuing the company at A$772 million, and have declined 41 percent in the past year. The New South Wales-based firm employs 6,000 people worldwide.