Magnetic Rail Group has reached a binding deal worth around $287m (A$425m) with Australian freight rail transport company Aurizon for the acquisition of the East Coast Rail (ECR) business.

The transaction also includes the assumption of ECR’s existing debt facilities, which originally amounted to $338m (A$500m).

With $84.5m (A$125m) of the proceeds to be deferred for 12 months, the completion is targeted for early 2023.

The deal completion awaits clearance from the Australian Competition and Consumer Commission (ACCC).

ECR, which is the coal haulage business of One Rail Australia (Ora), conducts operations in New South Wales and Queensland.

The divestment ‘is in line Aurizon’s Undertaking to the Australian Competition and Consumer Commission (ACCC), as part of its acquisition of ORA’.

Aurizon has included the ORA bulk and general freight assets in its business and is now named Aurizon Bulk Central.

These assets comprise 2,200km Tarcoola-to-Darwin rail infrastructure, South Australian regional infrastructure and five rail yards.

It also covers 68 active locomotives besides more than 1,000 active wagons and around 400 employees.

Aurizon managing director and CEO Andrew Harding said: “The sale provides the best outcome for Aurizon and its shareholders, delivering a strong sale price and certainty in completing the divestment.

“We are pleased to have secured the sale of the ECR business and look forward to the transaction completing in early 2023.”

In July this year, Aurizon completed the acquisition of ORA for $1.75bn.                                                                                                                

ECR’s disposal was in adherence to an agreement with the ACCC to stave off competition concerns.