STB Wants More Information on CN Finances

The U.S. Surface Transportation Board on Tuesday asked Canadian National for more detailed financial information about its proposed merger with Kansas City Southern.

Regulators said they will take a cautious approach to reviewing the merger.

CN was given until June 14 to provide copies of its financial advisors’ written opinions on the merger’s cost, debt commitment letters, and CN’s capital allocation policies.

STB members have expressed concern about the $19 billion in debt CN is taking on to buy KCS.

Montreal-based CN has argued that it has a strong balance sheet and can handle any debt it takes on to buy KCS in a $33.6 billion deal.

In a related development the STB has established a timeline for reviewing CN’s request to place KCS in a voting trust while regulators review the merger proposal.

The board said it would take comments on the voting trust request through June 28 with CN having a reply deadline of July 6.

This makes it likely regulators won’t issue a decision on the voting trust until early July at the earliest.

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