Railamerica (NYSE:RRA)
Historical Stock Chart
From Jun 2019 to Jun 2024
RailAmerica (NYSE:RRA) announced today that it has
completed the sale of its three railroad properties in Alberta, Canada
to Canadian National Railway Company (CN). The three properties are
the Central Western Railway, ("CWR"), the Lakeland & Waterways Railway
("LWR"), and the Mackenzie Northern Railway ("MKNR"). RailAmerica
received cash proceeds of $22.2 million ($26 million CAD). In
addition, RailAmerica may receive up to an additional $3.4 million ($4
million CAD) in future payments, depending on the development of new
business on the acquired railways.
"We are very pleased with the sale of these railroads. It will
enable us to use the proceeds to reduce bank debt and will create
financial capacity to acquire railroads that fit our criteria," said
Charles Swinburn, Chief Executive Officer of RailAmerica. "We
continually review the strategic and economic value of each of our
railroads based on these criteria. This sale is a consequence of that
continued review."
"While future traffic growth prospects for the railroads are good,
taking advantage of them would require significant capital
investment." said Donald Redfearn, President of RailAmerica. "We
determined that the prospect for using that capital to earn returns
that meet our targets are better achieved at other railroads we own.
CN will make an investment in these railroads to generate new traffic,
and will benefit from the long distance line haul of that traffic.
This mutually beneficial transaction is representative of our positive
working relationship with CN."
About the Railroads:
The 21-mile CWR owns and operates a switching railway in Central
Alberta. The CWR interchanges with CN at Dinosaur (Munson).
The 120-mile LWR operates from Edmonton to Boyle and from Boyle to
O'Morrow. The LWR interchanges with CN at the Walker Yard in Edmonton.
The 600-mile MKNR runs north from Smith, Alberta, located about
130 miles north of Edmonton, to Hay River, Northwest Territories. The
MKNR interchanges with CN in Smith.
In 2005, the Alberta properties moved approximately 50,000
carloads, generated revenue of $26 million (US) and earnings per share
of $0.04. The financial results of the Alberta properties will be
reclassified to discontinued operations in RailAmerica's future
financial statements.
RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional
rail service provider with 43 railroads operating approximately 8,000
miles in the United States and Canada. The Company is a member of the
Russell 2000(R) Index. Its website may be found at
http://www.railamerica.com.
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: This press
release contains forward-looking statements regarding future events
that involve risks and uncertainties that could cause actual results
to differ materially. Forward-looking statements speak only as of the
date the statement was made. The Company assumes no obligation to
update forward-looking information to reflect actual results, changes
in assumptions or changes in other factors affecting forward-looking
information. If the Company does update any forward-looking statement,
no inference should be drawn that the Company will make additional
updates with respect to that statement or any other forward-looking
statements. We refer you to the documents that RailAmerica files from
time to time with the Securities and Exchange Commission, such as the
Form 10-K, Form 10-Q and Form 8-K, which contain additional important
factors that could cause its actual results to differ from its current
expectations and from the forward-looking statements contained in this
press release.