RailAmerica Completes US $204 Million Sale of Freight Australia; will reduce debt with proceeds

Short line and regional rail service provider RailAmerica, Inc. has completed the sale of its Australian railroad, Freight Australia, to Pacific National. At closing, RailAmerica received cash of US $204 million (AUD $285 million). With the net proceeds from the sale, RailAmerica will pay off US $60 million in Senior Debt and expects to use the balance to repay other long-term debt, says the company.

RailAmerica purchased Freight Australia from the Victorian State Government in April 1999 for US $103 million (AUD $163 million).

“With the sale of Freight Australia now complete, we can concentrate on operating and growing our North American rail business. The proceeds from the sale will be used to pay down long-term debt, thus strengthening our balance sheet, significantly reducing our interest expense, and reaching our goal of a net debt-to-capital ratio of 50%," said Charlie Swinburn, RailAmerica’s Chief Executive Officer.

RailAmerica, Inc. operates approximately 9,000 miles in the United States and Canada.