CN expects to report an after-tax gain of
approximately $35 million in Q3
2011 from IC RailMarine Terminal Company sale
MONTREAL,
Aug. 2, 2011 /PRNewswire/ - As
announced previously, CN (TSX: CNR) (NYSE: CNI) reached a
definitive agreement to sell substantially all of the assets of IC
RailMarine Terminal Company (ICRMT), located on the east bank of
the Mississippi River at Convent,
La., to Raven Energy, LLC, an affiliate of Foresight Energy,
LLC ("Foresight") and the Cline Group ("Cline"), for a cash
consideration of US$73 million at
closing. Following receipt of regulatory approvals, the transaction
has closed and Cline assumed operation of the Convent transfer facility as of August 1, 2011. CN expects to report an
after-tax gain of approximately $35
million ($0.08 per diluted
share) in the third quarter of 2011 from this transaction.
As part of this sale agreement, CN has also
entered into a 10-year rail transportation agreement with Savatran
LLC, another affiliate of Foresight and Cline, to haul coal from
four Illinois mines to the
Convent transfer
facility. Savatran will ship a minimum volume of coal
via CN growing to 8 million tons per year as of 2014.
"We are excited that we have successfully
concluded this transaction," said Michael
Beyer, Foresight CEO. "The acquisition of the terminal and
the long term transportation partnership with CN firms up our
logistics for our growing export business and provides a platform
for us to immediately expand our export volumes."
Claude Mongeau,
president and chief executive officer of CN, said: "This
partnership with Cline is one of the key elements of our strategy
to leverage and expand our unique export coal franchise across
North America."
CN directly serves five export coal terminals in
Canada and the United States, and moved 21 million tons
of petroleum coke, thermal and metallurgical coal destined for
offshore markets in 2010.
Mongeau said: "With this partnership and the
significant coal mine and terminal expansions already announced or
planned along our rail network in Western
Canada, we hope to double our coal export volume over the
next four years if trends of increasing global demand
continue."
Forward-Looking Statements
Certain information included in this news
release are "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
under Canadian securities laws. CN cautions that, by their nature,
these forward-looking statements involve risks, uncertainties and
assumptions. The Company cautions that its assumptions may not
materialize and that current economic conditions render such
assumptions, although reasonable at the time they were made,
subject to greater uncertainty. Such forward-looking statements are
not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors which may cause the actual
results or performance of the Company or the rail industry to be
materially different from the outlook or any future results or
performance implied by such statements.
Important risk factors that could affect the
forward-looking statements include, but are not limited to, the
effects of general economic and business conditions, industry
competition, inflation, currency and interest rate fluctuations,
changes in fuel prices, legislative and/or regulatory developments,
compliance with environmental laws and regulations, actions by
regulators, various events which could disrupt operations,
including natural events such as severe weather, droughts, floods
and earthquakes, labor negotiations and disruptions, environmental
claims, uncertainties of investigations, proceedings or other types
of claims and litigation, risks and liabilities arising from
derailments, and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the
United States. Reference should be made to "Management's
Discussion and Analysis" in CN's annual and interim reports, Annual
Information Form and Form 40-F filed with Canadian and U.S.
securities regulators, available on CN's website, for a summary of
major risks.
CN assumes no obligation to update or revise
forward-looking statements to reflect future events, changes in
circumstances, or changes in beliefs, unless required by applicable
Canadian securities laws. In the event CN does update any
forward-looking statement, no inference should be made that CN will
make additional updates with respect to that statement, related
maters, or any other forward-looking statement.
CN - Canadian National Railway Company and its
operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and
Pacific oceans to the Gulf of
Mexico, serving the ports of Vancouver, Prince
Rupert, B.C., Montreal,
Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas
of Toronto, Buffalo, Chicago, Detroit, Duluth,
Minn./Superior, Wis.,
Green Bay, Wis., Minneapolis/St. Paul, Memphis, St.
Louis, and Jackson, Miss.,
with connections to all points in North
America. For more information on CN, visit the company's
website at www.cn.ca.
SOURCE CN