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Rail News: Rail Industry Trends

FECI ponders fleeting fate of telecommunications arm


Florida East Coast Industries Inc. (FECI) June 20 announced it's retained Morgan Stanley to help review strategic alternatives for wholly owned telecommunications subsidiary EPIK Communications Inc.

"There is over-capacity in the industry, and consolidation among competitors could reduce costs and strengthen service offerings for customers," said FECI Chairman and Chief Executive Officer Robert Anestis in a prepared statement.

EPIK's operating net-asset book value as of March 31 was about $200 million; if FECI consummates a transaction, officials believe it likely would be for less than book value, resulting in a non-cash charge to earnings.

EPIK owns and operates a telecommunications network linking major Florida cities, Atlanta and submarine telecommunications-cable landing
stations around Miami. The company's network includes about 1,850 inter-city route miles (278,000 fiber-strand miles) and 450 metro-ring route miles (19,500 fiber-strand miles).

FECI officials believe an EPIK transaction wouldn't affect the corporation's 351-mile regional Florida East Coast Railway.

Contact Progressive Railroading editorial staff.

More News from 6/20/2002