CP Bails On DRTP
CALGARY, April 1 /PRNewswire-FirstCall/ - Canadian Pacific Railway Limited (TSX/NYSE: CP) and Borealis Infrastructure Management Inc. announced that they have entered into a transaction that, subject to regulatory approval, will change their joint ownership of the Detroit River Tunnel Partnership (DRTP) to a majority position for Borealis. CP retains its exclusive right to operate and maintain the Detroit River tunnel; however, CP's interest will decrease to 16.5 per cent from 50 per cent with the completion of this transaction. CP's proceeds from the transaction will be $110 million plus additional proceeds of $22 million based on future freight volume through the tunnel.
The DRTP owns the Detroit River Rail Tunnel which carries CP's rail line from Windsor to Detroit. The tunnel, which transports rail traffic across the Canada-US border, is a vital link in the North American transportation infrastructure.
"I am pleased with the latest development in our long-standing partnership with Borealis and its parent, the OMERS pension fund," said Kathryn McQuade, Canadian Pacific's Chief Financial Officer. "This transaction allows us to realize value for our asset and strengthen our balance sheet while preserving our right to operate the tunnel."
"The Detroit River Tunnel is an investment that fits into our long-term strategy of securing infrastructure assets that can generate stable and sustainable returns for OMERS plan members," commented OMERS President and CEO Michael Nobrega.
About Canadian Pacific
Canadian Pacific, through the ingenuity of its employees located across Canada and in the United States, remains committed to being the safest, most fluid railway in North America. Our people are the key to delivering innovative transportation solutions to our customers and to ensuring the safe operation of our trains through the more than 900 communities where we operate. Canadian Pacific is proud to be the official rail freight services provider for the Vancouver 2010 Olympic and Paralympic Winter Games.
About Borealis Infrastructure
Borealis Infrastructure identifies, invests in and manages infrastructure assets on behalf of OMERS. Borealis has been in the infrastructure business since 1999 and has developed a diversified portfolio of infrastructure assets in Canada and globally with an enterprise value of over $40 billion.
OMERS is one of Canada's largest pension funds with an established track record of strong and steady performance and with investments in a wide range of companies and assets around the world. OMERS provides retirement benefits to over 390,000 members from the local government sector in Ontario.
SOURCE Canadian Pacific Railway