RailAmerica Realizes More Than $10 Million From Asset Sales & Payment.Business Editors
BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla.--(BUSINESS WIRE)--May 22, 2000
HIGHLIGHTS: -- Portion of Georgia Southwestern Railroad Sold for $2.0 Million -- Fulfillment of Contractual Obligation from CN Amounts to $5.7 Million -- $2.3 Million Received from Sale of Minority Interest in Australian Passenger Service -- Other Asset Sales Net $0.5 Million -- Proceeds to be Used to Reduce Debt
RailAmerica, Inc. (Nasdaq:RAIL), the world's largest operator of short line and regional freight railroads, today announced that it has completed transactions that have resulted in payments of more than $10 million to the Company. The transactions included: 1) the sale of a portion of its Georgia Southwestern Railroad The Georgia Southwestern Railroad (AAR reporting marks GSWR) is a Class III short line railroad company operating in southwestern Georgia and a small portion of Alabama. (GSWR GSWR Georgia Southwestern Railroad
GSWR Glasgow and South Western Railway (Scotland)
GSWR Galvanized Steel Wire Rope ) to the State of Georgia for $2.0 million; 2) a payment of $5.7 million from Canadian National Railway Canadian National Railway, rail system in Canada and the United States, extending from coast to coast in Canada with many branch lines in each province and in the United States. (CN) in fulfillment of contractual obligations; 3) proceeds of $2.2 million received from the sale of the Company's minority interest in its Australian passenger service consortium; and 4) $0.5 million received from the sale of other non-operating real estate property.
Effective today, the GSWR sold to the State of Georgia a 71-mile portion of the GSWR railroad between Rochelle and Preston, Georgia and between Omaha, Georgia and Mahrt, Alabama for $2.0 million. Earlier, on May 4, 2000, GSWR granted a rail freight easement easement, in law, the right to use the land of another for a specified purpose, as distinguished from the right to possess that land. If the easement benefits the holder personally and is not associated with any land he owns, it is an easement in gross (e.g. between Vidalia and Preston, Georgia and between Omaha, Georgia and Mahrt, Alabama to the Heart of Georgia Railroad The Heart of Georgia Railroad (AAR reporting marks HOG) was founded in December 1999, to operate track between Vidalia, Georgia, and Mahrt, Alabama. After starting operations in 2000, the railroad ran between Rochelle, Georgia, and Preston, Georgia, reaching Vidalia later (HOG). The GSWR will continue to operate the 288 miles of rail line between Columbus and Albany, Georgia; Smithville, Georgia to White Oak, Alabama; and Cuthbert to Bainbridge, Georgia. Headquartered in Americus, Georgia, the GSWR moves approximately 12,000 carloads of grain, peanuts, chemicals and minerals annually and interchanges traffic with Class I carriers CSX Transportation and Norfolk Southern.
In other transactions, the Company realized approximately $8.5 million in proceeds. In April 2000, RailAmerica received a payment of $5.7 million from CN in fulfillment of contractual obligations arising from an agreement between CN and RailTex. The Company's Australian passenger rail consortium, the Great Southern Railways Limited (GSR See Gigabit Switch Router. ), recently received $2.3 million in proceeds from the sale of its 10.6% interest in GSR to Serco Asia Pacific Pty Limited, a subsidiary of Serco Group Plc. Finally, over the last several months RailAmerica sold non-operating real estate parcels totaling $0.5 million.
Gary O. Marino, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of RailAmerica, commented, "Our proceeds of more than $10 million from these transactions provide a great start in our drive to reduce debt by more than $100 million over the next several months. As previously announced, our asset disposition plan will allow us to increase our focus on our major, core railroads and generate significant cash proceeds that will be used in the reduction of debt incurred in connection with our acquisition activities over the past year. In the coming weeks, we anticipate making further announcements associated with this plan as we are targeting to sell up to ten of our smaller, non-strategic rail properties, excess rolling stock rolling stock
Any of various readily movable transportation equipment such as automobiles, locomotives, railroad cars, and trucks. Rolling stock generally makes good collateral for loans because the equipment is standardized and easily transportable among , other non-operating real estate and our specialty truck trailer manufacturing business, Kalyn/Siebert. The closing of these transactions should strengthen our balance sheet, reduce interest expense and increase profitability, thereby enhancing shareholder value."
RailAmerica, Inc. (www.railamerica.com), the world's largest operator of short line and regional railroads, owns or has equity interests in 50 short line and regional railroads operating more than 12,500 route miles in the United States, Canada, Australia and the Republic of Chile. The Company also owns Kalyn/Siebert, L.P. and Kalyn/Siebert, Canada, Inc., specialty truck trailer manufacturers with production facilities in Gatesville, Texas and Trois-Rivieres, Quebec, Canada.
This press release contains forward-looking statements regarding future events and the performance of RailAmerica that involve risks and uncertainties that could cause actual results to differ materially including, but not limited to, failure to achieve expected synergies, failure to successfully integrate operations, failure to service debt, failure to successfully market and sell non-core properties and assets, economic conditions, customer demand, increased competition in the relevant market, and others. 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-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. , Form 10-Q Form 10-Q
See 10-Q. and Form 8-K Form 8-K
The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock.
See 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.