(RailAmerica issued the following news release on January 16.)
BOCA RATON, Fla. — RailAmerica today announced that it has entered into an agreement to sell its 55% Chilean Railroad interest for $18.1 million to an affiliate of its Chilean partner, Andres Pirazzoli y Cia., Ltda. RailAmerica purchased its 55% interest in Ferronor from the Chilean government in February 1997 for $6.8 million. The consideration to be paid to RailAmerica will consist of cash payments totaling $10.75 million on or before February 5, 2004, and delivery of secured instruments totaling $7.4 million which will bear interest and be payable over a 6-1/2 year period.
“We have announced our intentions to pursue a strategy to reduce debt and focus on growing our core North American rail business,” said Gary O. Marino, Chairman, President and CEO of RailAmerica. “A component of this strategy included the divestiture of our Chilean railroad interest. Although our Chilean operation performed exceptionally well for RailAmerica since acquisition, this transaction will allow RailAmerica to monetize this investment and redeploy the proceeds toward debt reduction or other North American rail acquisitions. An additional benefit of this sale will be that it will eliminate approximately $20 million of Ferronor debt from our balance sheet. I am pleased to announce today that we have now executed an agreement which will accomplish these objectives.”
RailAmerica, Inc. is the world’s largest short line and regional railroad operator with 49 railroads operating approximately 17,700 miles in the United States, Canada, and Australia, Chile and Argentina, including track access arrangements. The Company is a member of the Russell 2000(R) Index. Its website may be found at http://www.railamerica.com.