Jun. 16, 2011 (Canada NewsWire Group) --
NEW ORLEANS, LA, June 16, 2011 /CNW Telbec/ - CN (TSX: CNR) (NYSE: CNI) announced today a definitive agreement to sell substantially all of the assets of IC RailMarine Terminal Company (ICRMT) to Raven Energy, LLC, an affiliate of Foresight Energy, LLC ("Foresight") and the Cline Group ("Cline"), for US$73 million.
ICRMT is an indirect subsidiary of CN, located on the east bank of the Mississippi River at Convent, La., west of New Orleans. The terminal stores and transfers bulk commodities and liquids between rail, ship and barge, serving customers in North American and global markets.
CN expects the transaction to close in approximately 45 days, following receipt of regulatory approvals. Upon closing, CN would enter 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. Under the agreement, Savatran would ship a minimum annual volume of coal via CN.
Luc Jobin, executive vice-president and chief financial officer of CN, said: "We are pleased to have concluded an agreement for the sale of ICRMT assets, with plans to enter into a long-term transportation agreement for CN coal shipments to the terminal. These initiatives will allow CN to make better use of its southern rail corridor while expanding its participation in the growing export of Illinois Basin coal."
Michael Beyer, chief executive officer of Foresight Energy, said: "The acquisition of these terminal assets, as well as the signing of the transportation agreement with CN, is an important next step in our continuing investment in infrastructure assets that provide transportation and market optionality for our low-cost coal mining operations. This firms up the logistics for our coal sales into the international coal markets, which are a significant and growing part of our business."
Foresight will expand the capacity of the facility to eight million tons of export coal per year, from a current capacity of approximately four million tons, with the potential for an additional eight-million-ton expansion as market conditions warrant.
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.
Foresight Energy, LLC is a leading Illinois Basin coal producer with almost three billion tons of coal reserves and coal production from four mining complexes in Illinois. It is a leading exporter of thermal coal to the international market, including sales to power generators in Germany, the United Kingdom, Greece, India among others.
Raven Energy, LLC is an affiliate of Foresight Energy, LLC and the Cline Group.
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