CP to reduce stake in rail tunnel
Canadian Pacific Railway will reduce its ownership interest in the company that owns the Detroit River Rail Tunnel from 50 percent to 16.5 percent under a deal announced Wednesday.
CP is selling most of its stake in the crossing to the other partner in the tunnel, Borealis Infrastructure Management Inc., for $110 million, plus additional proceeds of $22 million based on future freight volume.
The Detroit River Rail Tunnel carries CP’s rail line from Windsor to Detroit
“I am pleased with the latest development in our longstanding 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.”