Irving subsidiary considering acquiring insolvent MMA rail line
Published Monday, August 19, 2013 2:01PM EDT
Last Updated Monday, August 19, 2013 2:02PM EDT
MONTREAL -- The transportation subsidiary of East Coast conglomerate Irving is keeping its options open about a possible acquisition of the railway at the centre of last month's deadly Lac-Megantic train crash that killed 47 people.
J.D. Irving vice-president Mary Keith says the operator of the NB&M Railways, which has nearly 900 kilometres of track in Maine and New Brunswick, has been in discussion with government authorities.
Keith says the company is assessing its options to sustain rail links that are vital to both the Maine economy and to manufacturing operations in New Brunswick.
However, Keith says the company has not made any offer to purchase insolvent Montreal, Maine and Atlantic Canada Railway, which continues to operate while under creditor protection.
New Brunswick Southern Railway is MM&A Canada's largest unsecured creditor after the parent company.
Its claim of $2.35 million represents about half of the money owing to unsecured creditors excluding Montreal, Maine & Atlantic Railway's $43.4-million claim.
In 2011, NB&M took over about 400 kilometres of track that Montreal, Maine and Atlantic abandoned in Maine. It also purchased a 45-kilometre line from MM&A in June, including a bridge that crosses into Canada with connections to the Canadian National Railway (TSX:CNR) line.
The Canadian Transportation Agency announced late Friday that Montreal, Maine and Atlantic's licence is valid until Oct. 1, reversing a move made earlier in the week.
The arm's length federal regulator had suspended its certificate of fitness after ruling it didn't have sufficient third-party liability insurance.
That decision was overturned after the agency determined that the railway had sufficient coverage to operate in the short-term.