Posts Tagged ‘short line and regional railroads’

Bill Makes Permanent Short Line Tax Credit

December 23, 2020

The budget and pandemic relief legislation adopted by Congress on Monday night will affect various transportation programs, including short line railroads.

The bill also makes permanent a tax credit for short line and regional railroads.

The credit in question is known as Section 45G and has been used by short lines and regional railroads to pay for infrastructure projects.

The tax credit supports private investment in improving and building infrastructure up to a $3,500 cap per short-line railroad mile.

The American Short Line and Regional Railroad Association has long fought to make the credit permanent. Until now, it had been subject to being reauthorized periodically.

The credit was created in 2005 and ASLRA said it has enabled its members to invest more than $5 billion in infrastructure projects, including rebuilding track that had deteriorated due to deferred maintenance and was on the brink of abandonment.

ASLRRA President Chuck Baker said in a statement that making the credit permanent will assure “long-term tax certainty.”

G&W to be Acquired by Brookfield Infrastructure

July 2, 2019

Genesee & Wyoming has agreed to be acquired by Brookfield Infrastructure Partners in a transaction that is being valued at $8.4 billion, including outstanding debt.

The sale is expected to close by the end of this year or in early 2020 pending approval by the U.S. Surface Transportation Board and a review by the U.S. Justice Department and the Committee on Foreign Investment in the United States

Certain G&W stockholders must also approve the transaction, which will transform G&W into a privately held company.

Terms of the acquisition say that each issued and outstanding share of G&W stock would be converted into the right to receive $112 per share in cash, which is a 39.5 percent premium to the unaffected per share price of $80.28 on March 8, the day before the initial media speculation of a potential transaction began.

In a news release, Brookfield said its investment in the deal will total about $500 million of equity, funded from existing liquidity that totaled about $1.9 billion as of June 30. The remainder of the business would be owned by Toronto-based Brookfield Infrastructure’s institutional partners and GIC.

G&W owns or leases 120 freight railroads organized in eight operating regions including the Ohio Central System.

Its regional and short line railroads operate in 41 states and four Canadian provinces. G&W also has rail holdings in Australia and Europe.