What's next for MMA?

Millinocket to Searsport will thrive under Irving (Did I give anything away?). However, if the investment/holding firm that is the stalking horse bid gets the whole property, they will sell it in chunks. Irving doesn't want the Moosehead and sadly, I believe it has no place in the immediate future. MDOT may pick it up for future presevation... If the connection between the two halves were connected, the Moosehead would be valuable again.

Look for VRS to Farnham.

Montreal Gazette, 12/5:

......"MONTREAL — The Montreal Maine & Atlantic Railway hopes to restart rail service to businesses in Lac-Mégantic, possibly as early as next week, the company’s bankruptcy trustee said Thursday...........Robert Keach said MMA tracks in Lac-Mégantic have been repaired, restoring an east-west connection on the company’s rail line.......The physical and technical requirements for service to be restored have been completed,” said Keach, a Portland, Me., lawyer who was appointed the company’s trustee in August. The tracks are being tested and inspected, he said"..........

......."Discussions about resuming railway service are underway with provincial and federal transportation authorities and the town of Lac-Mégantic, he said. Service would be first restored to businesses in the area, Keach said. Whether or when to resume other operations on the line will be up to whoever buys the bankrupt railway, he said"........

........."While MMA has continued operations on both sides of the border, Keach said any decisions about whether the railway will resume carrying crude oil will be up to its new owner. He said that he doesn’t expect MMA trains to transport any crude oil before the company is sold".......There is no legal restriction on carrying crude, but there is no demand for it right now,” he said"........

http://www.montrealgazette.com/news/tra ... story.html" onclick="window.open(this.href);return false;

Evidently, according to the article, a "through connection" has been completed that would allow east/west traffic again.

SRM

Well, now there are 2 sources reporting what Keach said about through-tracks being restored - the Montreal Gazette (previous post) and Bloomberg (my post a few posts ago). So probably we can rule out the possible error in reporting. JS

Passenger trains typically don't destroy entire downtowns when they crash.

The mayor has an obligation to protect her community. Her tactics in doing so may or may not be practical or feasible, but no one should be surprised by her statements and actions after the heart of her community was incinerated. The fact that she's willing to even entertain the idea of resumed rail service says a lot about her willingness to be friendly with the railroad. Not everyone would be so welcoming.

MEC407 wrote:The mayor has an obligation to protect her community. Her tactics in doing so may or may not be practical or feasible, but no one should be surprised by her statements and actions after the heart of her community was incinerated. The fact that she's willing to even entertain the idea of resumed rail service says a lot about her willingness to be friendly with the railroad. Not everyone would be so welcoming.

Lac-Mégantic lacks control over what ships through town!

......"When loaded trains begin moving through downtown Lac-Mégantic, Que., this month, they will pass through the heart of the damaged town and within sight of dozens of buildings that were levelled after an oil train exploded this summer, killing 47 people.........Discussions are under way for a bypass to be built around the town, but it is unclear how long those talks could take and whether the town will have any power to prevent oil from moving through its boundaries once again. Lac-Mégantic is still struggling to rebuild after the train carrying crude oil derailed July 6, setting off a series of explosions".........

........"The first trains should begin servicing the industrial sector before the New Year, according to a trustee for Montreal, Maine & Atlantic........While rail traffic will initially be limited to dry goods, the town does not have the right to determine what rolls through by rail in the future!".......

........"Railway trustee Robert Keach said the railway could have a new owner by mid-January, and it will be up to that company to determine what types of goods travel through the town........Given that Lac-Mégantic lies on a shipping route between oil fields in North Dakota and a refinery in New Brunswick, there is considerable demand to move crude on those tracks".........

......."Transport Canada declined to answer questions about whether oil would be permitted to move through Lac-Mégantic in the future..........A spokeswoman said the department would ensure the tracks are safe before the first trains start running"........

Article in Globe and Mail: http://www.theglobeandmail.com/news/nat ... e15816085/" onclick="window.open(this.href);return false;

Also in this article is the ongoing discussion, and study, of a possible bypass around the town. While this may be possible one would think it would be an awful lot of money to do so as the line was undoubtedly built in the most practical and most cost efficient way......in the beginning. And also, if Lac Megantic succeeds with obtaining a bypass, when will all the other towns along major rail lines, want THEIR bypasses built, for the same reason? Seems like opening a large can of worms.

SRM

UTUconductor1 wrote:What happened to the stalking horse bid? Did the "horse" come up lame on his way to the court house, or was the trustee overly optimistic?

Also, rumor has it that MMA's vice precident of sales has been fired. Can anyone confirm that rumor?

There is and you will have to wait and see.

Not sure about VP of Sales, but Im sure this transition period is a good time for some people to move on to other things (either by their own choice, or not).

From the Bangor Daily News:

Bangor Daily News wrote:The trustee for the bankrupt Montreal, Maine and Atlantic Railway has signed a sales agreement for the railroad’s assets with a company that appears to be affiliated with a global investment firm based in New York City.

In documents filed with the court on Thursday, Robert Keach, MMA’s trustee, asked the court for permission to sell “substantially all” assets of MMA and MMA Canada to Railroad Acquisition Holdings LLC for $14.25 million.

The sale is not a done deal yet. Railroad Acquisition Holdings is what’s known as a “stalking horse” bidder. In a bankruptcy auction, the stalking horse is a company that promises to buy the bankrupt company’s assets for a certain price unless a better and higher bid is obtained during the auction process.
. . .
Railroad Acquisition Holdings appears to be affiliated with Fortress Investment Group, a publicly traded investment firm that manages roughly $58 billion in assets.

Read the rest of the article at: http://bangordailynews.com/2013/12/13/b ... c-railway/" onclick="window.open(this.href);return false;

More information is also here:

http://online.wsj.com/news/articles/SB1 ... 1915718202" onclick="window.open(this.href);return false;

I'm not knowledgable enough to speculate, but it seems like this may present a further issue for future oil trains:

http://www.theglobeandmail.com/news/pol ... e15943495/" onclick="window.open(this.href);return false;

From the Globe and Mail:

The federal government will, for the first time, designate crude oil a highly dangerous substance and introduce tougher safety and testing measures for shipping oil by rail, Transport Minister Lisa Raitt has told The Globe and Mail.

More details in the article.

Good luck stopping hundreds of monthly oil shipments.

I have to wonder if a major group like that would consider taking over MMA without the express intention of transporting HAZMAT.

Per the WSJ article, it sounds like the Fortress bid is just the catalyst and someone else is expected to acquire MM&A in late January. Having said that, Rail America was a Fortress investment for three years (2006-09) until RA was set free via IPO (RA is now part of Genesee & Wyoming). But Fortress still owns the Florida East Coast RR, which apparently is thriving.

gokeefe wrote:I have to wonder if a major group like that would consider taking over MMA without the express intention of transporting HAZMAT.

I would say yes. If Irving continues their current preference of ship/barge supplied crude from the Gulf or Albany, the dormant Moosehead makes a pretty attractive ROW for an export pipeline. Scrap value, real estate rights, VRS to Farhnam and an intact Searsport to Millinocket railroad (EMR/NMR?) make $14.25 million a palatable starting point for an investment firm I would think.

I am concerned about the idea of the Moosehead Sub being scrapped. This would be bad for that part of Maine and would permanently close off certain development options. At least in the Greenville area the rail of a good weight and condition (115 lb.).