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5/15/2003



Rail News: Rail Industry Trends

RailAmerica subsidiary offers $90 million for New Zealand's Tranz Rail


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RailAmerica Inc. recently made a $90 million cash tender offer to acquire Tranz Rail Holdings Ltd.



Under the proposed bid, a new RailAmerica subsidiary would offer 43 cents for each Tranz Rail share, and assume or refinance about $135 million of Tranz Rail’s lease obligations and outstanding debt.



"Tranz Rail is an important asset for New Zealand’s economy and transportation infrastructure," said Gary Marino, chairman, president and chief executive officer of RailAmerica in a prepared statement. "As we have done in previous acquisitions, including our acquisition of Freight Australia, we believe we can significantly improve customer service by implementing our customer-driven operating principles."



Consistent with New Zealand’s Takeover Code, no agreement or arrangement has been made, or is proposed to be made, between RailAmerica and Tranz Rail in connection with the offer.

The offer would be funded through RailAmerica’s existing credit facilities, and is scheduled to commence between May 30 and June 14. The offer is subject to Tranz Rail equity security holders’ 90 percent acceptance, Rail New Zealand obtaining necessary consents to complete the offer under the Overseas Investments Regulations of 1995, Tranz Rail refraining from selling businesses or assets outside the ordinary course of business and RailAmerica obtaining lender consent for required waivers and amendments to its existing credit facilities.



A multi-modal freight transportation company, the 2,400-mile Tranz Rail is the only freight provider in New Zealand, and provides passenger services in Auckland and Wellington. Tranz Rail’s operating revenue for fiscal-year 2002 was $331 million.


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