3i, Regional Rail to acquire Minnesota Commercial Railway

3i RR Holdings, Regional Rail Holdings and their related entities intend to acquire Minnesota Commercial Railway Co. (MNNR) , a short line that operates 86 miles of rail line near Minneapolis and St. Paul, according to a notice filed with the Surface Transportation Board.

Under a stock purchase agreement, Regional Rail LLC proposes to acquire all the existing equity interest of MNNR and assume direct control of the rail line. 3i RR would assume indirect control of MNNR. The notice further states that no significant changes in the rail services now provided by MNNR are anticipated as a result of the proposed sale and that the agreement does not include any provision that would limit the future interchange of traffic with a third-party connecting carrier.

The transaction might be completed on or after June 1, according to an STB decision filed May 16. MNNR serves manufacturers, warehouses, lumber and steel transloads, and grain mills.

Meanwhile, Star America Fund II GP LLC and its entities have informed the STB that they intend to acquire control of three short lines: Belpre Industrial Parkersburg Railroad LLC (BIP), Bucyrus Industrial Railroad LLC (BIR) and Cornhusker Railroad LLC (CNRR).

According to the STB notice, which was reported May 16 in the Federal Register, Star America Rail Holdco currently holds a noncontrolling interest in the parent of Cathcart Rail Services, a noncarrier that controls BIP, BIR and CNRR. Under the transaction, Star America has agreed to acquire a controlling interest in Cathcart Rail Holdco, and therefore indirectly in BIP, BIR and CNRR.

The applicants stated in their notice that the short lines would not connect with each other or other railroads in the corporate family, nor does the acquisition involve a Class I.