Seacor Holdings Inc. and railroad operator Genesee & Wyoming Inc. (G&W) have formed a 50/50 joint venture to run CG Railway Inc., the U.S.-Mexico rail ferry service Seacor acquired when it recently took over bankrupt International Shipholding Corp. (ISH). Terms were not disclosed.
The companies said they will invest in the rail ferry vessels to enhance service reliability. “We are committed to improve the rail ferry’s on-time performance by leveraging Seacor’s expertise in marine operations,” said CG Railway senior vice president Kevin Wild.
Launched in 2001, the railway takes railroad cars full of forest and agricultural products, chemicals and minerals on two 585' double-deck vessels with eight tracks on the top and seven on the bottom. Departures are every four days. The transit takes three days over 900 miles of the Gulf of Mexico between Mobile, Ala., and Coatzacoalcos, Mexico. The short line was designed to cut travel time and logistics hassles in the wake of the North American Free Trade Agreement (NAFTA).
CG Railway businesse include a U.S. Class III freight railroad that connects in Mobile with G&W’s Alabama & Gulf Coast Railway (AGR), BNSF (via AGR), Canadian National (CN), CSX, Kansas City Southern (via CN) and Norfolk Southern, and connects in Coatzacoalcos with Ferrosur, the railroad that serves central and southern Mexico. CGR also has long-term agreements to operate purpose-built rail ferry terminals in the ports of Mobile and Coatzacoalcos, and a 10,000-sq.-ft., food-grade, truck-to-rail transload facility and a railcar repair shop in Mobile.
G&W plans to work with Ferrosur and Ferromex “to expand the current customer base,” said G&W chief commercial officer Michael Miller. “Since G&W’s short line railroads maintain close commercial relationships with customers and connecting Class I railroads across the southeastern U.S., we also look forward to offering a more direct option for these shippers and others east of the Mississippi to reach central and southern Mexico.”
Fort Lauderdale, Fla.-based Seacor acquired ISH in a restructuring that includes the issuance of new equity to Seacor in exchange for $10.5 million cash and the conversion of $18.1 million in outstanding debtor-in-possession financing claims to equity. In addition, there’s $25 million in a new senior debt exit facility.
New Orleans-based ISH, founded in 1947 as Central Gulf Steamship Corp., filed for bankruptcy protection in July 2016 after trying to shed assets and negotiate with lenders. The company operated 21 U.S. and foreign-flag vessels.