American railway company Genesee & Wyoming has bought FreightLink for $334 million and will assume about $1.7 million of FreightLink's debt.

FreightLink, originally valued at about $1.2 billion, went into administration after some debt holders refused to agree to an earlier deal to sell the company. It has been in receivership since November 2008.

FreightLink owns and operates the Adelaide-to-Darwin railway, which mainly hauls commodities for mining companies.

Media reports said proceeds of the sale will go towards paying off more than $300 million in FreightLink's senior debt from bankers, including ANZ and BankWest. A small surplus will go to mezzanine creditors.

The 1420-kilometre Adelaide to Darwin railway has been on the auction block for almost two years. Last year, KordaMentha attempted to sell the railway, when it was appointed receiver of FreightLink after a 2008 sale fell through, but KordaMentha was unable to achieve a suitable price.

FreightLink began operation in 2004 after a $1.2 billion construction of the Alice Springs to Darwin railway section as part of a public-private partnership. The rail line is on land leased to FreightLink under a concession agreement that ends in 2054.

Genesee & Wyoming has managed FreightLink's rolling stock since its inception. General freight makes up more than three-fifths of FreightLink's revenue and bulk minerals most of the rest.

In a statement, Genesee & Wyoming said it expects FreightLink to add about $145 million of revenue and $35 million of operating income in the first 12 months of ownership.