(Reuters circulated the following on April 1, 2009.)
TORONTO — Canadian Pacific Railway said on Wednesday it planned to cut its holding in the key Detroit River Tunnel Partnership, giving a majority ownership to one of the country’s biggest pension funds.
CP, Canada’s No. 2 railway, said it will sell a majority stake in the tunnel which carries CP’s rail line from Windsor to Detroit, to Borealis Infrastructure, an investment arm of the big OMERS pension fund.
Once the deal, which is subject to regulatory approval, is completed, Borealis would have a majority position in the partnership, while CP retains exclusive operating rights to the tunnel.
The deal, which reduces CP’s stake to 16.5 percent from 50 percent, will see the railway receive proceeds of C$110 million ($86.9 million) plus additional proceeds of C$22 million based on future freight volume through the tunnel. ($1=$1.26 Canadian)