BOCA RATON, Fla. — RailAmerica, Inc. announced on December 27 that it has entered into an agreement for the sale of its 44-mile Dakota Rail Railroad (DAKR) to Hennepin County Regional Rail Authority for total consideration of $7.6 million. The rail line runs between Wayzata and Hutchinson, Minnesota (suburban Minneapolis). This transaction is part of RailAmerica’s asset rationalization plan to sell non-core, non-strategic assets and reduce debt.
Gary O. Marino, Chairman, President and CEO of RailAmerica, said, “Due to insufficient shipper demand, RailAmerica suspended regular freight service on this line over a year ago. As a consequence, there is negligible loss of revenue and EBITDA associated with this transaction. In addition, we will realize substantial debt reduction and enhanced cash flow from the sale. The County, however, believes the rail line is capable of producing long-term benefits to the region through the re-establishment of rail freight service.”