CALGARY — Canadian Pacific Railway (CPR) and Rail World, Inc., a Chicago-based railway investment and management company, announced that Rail World’s subsidiary, Montreal, Maine & Atlantic Railway (MMA) had concluded an agreement under which MMA will acquire Canadian Pacific Railway (CPR) lines between the US/Canadian border at Richford, Vermont, through Brookport to St. Jean, Quebec and the north-south line from St. Rosalie through Farnham to Stanbridge that were previously leased to Quebec Southern Railway (QSR).
In July, MMA signed an agreement with the bankruptcy Trustees of the Bangor & Aroostook system (B&A) and QSR to purchase substantially all of their rail assets, which connect with CPR trackage at Richford and at Brookport, Quebec, which is subject to confirmation by B&A’s bankruptcy court in Portland, Maine on October 8th.
Edward A. Burkhardt, President of MMA, said, “Concluding these negotiations with Canadian Pacific is a major step toward completing our purchase of the majority of B&A’s rail assets. CPR will be our main interchange connection, and we look forward to close cooperation in marketing joint MMA – CPR service through the Montreal gateway.”
The rail lines involved provide access for B&A to Montreal and to B&A’s lines in Vermont. As a part of the agreement reached, CPR and MMA have created a commercial alliance designed to “work together to enhance the operation and viability of the lines MMA is purchasing, provide competitive rail service to shippers, and provide mutual long-term benefits”
The agreement is also designed to maximize routing of traffic over CPR lines, and to provide reciprocal pricing authority to both parties.
Burkhardt also announced that MMA had removed the financing contingency from its agreement with the B&A Trustee. He said that “MMA’s financing, composed of senior debt, mezzanine debt, and equity, has been fully committed.” The financing is being arranged by Macquarie Bank (US).
Fred Green, Senior Vice President ? Sales and Marketing of CPR said “CPR has been concerned about the bankruptcy of the B&A system railways, which would have jeopardized rail service to shippers in the area. We are aware that MMA’s business plan provides for the continued service to substantially all of the B&A system’s customer base. He said “We think the joint MMA – CP service via Montreal can and will be the premier rail service offered in Northern New England and New Brunswick.”