September 9, 2005
RailAmerica to acquire four short lines, lease 48-mile CSX branch line
On Sept. 30, RailAmerica will be home to another four short line operations. Alcoa, Inc., selected the holding company to acquire four railroads serving its aluminum manufacturing operations in Texas and New York, and a former specialty chemicals facility in Arkansas. As part of the deal, RailAmerica and Alcoa will enter into long-term service agreements.
The $77.5 million price for Point Comfort & Northern (Port Comfort, Texas), Rockdale, Sandow & Southern (Sandow, Texas), Massena Terminal (Massena, N.Y.,), and Bauxite & Northern (Bauxite, Ark.) is said to be based on RailAmerica assuming a targeted permanent working capital deficit. In addition, RailAmerica plans to fund substantially all the cash purchase price through a $75 million increase in the term loan portion of its existing senior secured credit facility.
We look forward to providing quality rail service to the Alcoa facilities as well as other customers on the line, said Charles Swinburn, CEO of RailAmerica, during today's announcement.
Meanwhile, RailAmerica has signed a 25-year lease to operate CSX Transportation's 48-mile Fremont branch. The line runs from Fremont, Mich., to West Olive, Mich., and interchanges with RailAmerica's Michigan Shore Railroad and CSXT. RailAmerica will begin service here on Sept. 10.
September 8, 2005