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RailAmerica sells majority stake in Chilean railroad

RailAmerica Inc. is closer to becoming a solely North American short-line holding company. On Jan. 16, the company announced plans to sell its 55 percent interest in Chilean railroad Ferronor to an affiliate of its Chilean partner, Andres Pirazzoli y Cia Ltda., for $18.1 million.

The transaction comprises a $10.75 million cash payment to be made on or before Feb. 5, and $7.4 million in securities that will bear interest and be payable during a six-and-a-half-year period.

"Although our Chilean operation performed exceptionally well, this transaction will allow RailAmerica to monetize this investment and redeploy the proceeds toward debt reduction or other North American rail acquisitions," said RailAmerica Chairman, President and Chief Executive Officer Gary Marino in a prepared statement, adding that the sale eliminates about $20 million in Ferronor-derived debt from RailAmerica's balance sheet.

In February 1997, RailAmerica purchased the Ferronor stake from the Chilean government for $6.8 million

The company continues to seek a buyer for its last international property, Freight Australia.

Contact Progressive Railroading editorial staff.

More News from 1/19/2004