The deal, with Magnetic Rail Group, would also mean the buyer would assume the original $500 million debt.

Aurizon needed to sell the east coast rail business, which has coal haulage operations in NSW and Queensland, to satisfy its undertaking with the Australian Competition and Consumer Commission.

The deal was expected to be finalised in early 2023 and no capital gains tax was anticipated. Had Aurizon not found a buyer through a trade sale, a float and listing of the east coast rail was an option.

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

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

“We have already successfully integrated One Rail Australia bulk and general freight assets into our bulk business and we are excited about both the quality of these assets and the many opportunities for growth.”

Aurizon said the positive earnings contribution from the east coast rail business was expected to be more than offset by the transaction costs resulting in a net loss in the half year.

The company would use the sale proceeds to initially reduce debt.