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RailAmerica reaches agreement to sell Freight Australia - its last international holding

RailAmerica Inc. soon will own and operate only North American regionals and short lines. On March 29, the holding company announced it will sell Freight Australia to Australian freight-rail logistics company Pacific National for $214 million.

Pacific National paid RailAmerica a cash deposit of $11 million to execute the sale agreement. The company will pay the remaining $203 million in cash at closing, which is expected during the second quarter pending approvals by the state of Victoria and Australian Competition and Consumer Commission.

"This transaction will allow RailAmerica to … redeploy the proceeds toward significant debt reduction and other general corporate purposes," said William Pagonis — who earlier this month was named RailAmerica chairman — in a prepared statement. "Upon closing of the transaction, $59 million of senior debt will be paid off with the proceeds."

In April 1999, RailAmerica acquired Freight Australia from the Victorian state government for $103 million. The company has no other international holdings because in January, it sold its 55 percent interest in Chilean railroad Ferronor to Andres Pirazzoli y Cia Ltda., an affiliate of RailAmerica's Chilean partner, for $18.1 million.

After Pacific National acquires Freight Australia, RailAmerica will own and operate 46 U.S. and Canadian regionals and short lines.

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More News from 3/30/2004