OmniTRAX, the short line railroad company that owns and operates over 20 railroads in the U.S., has signed a letter of intent to purchase the bankrupt San Luis and Rio Grande Railroad.
The Valley Courier reports that while OminTRAX has signed a letter of intent to purchase the SLRG, the railroad has not yet been sold. William Brandt, the trustee overseeing the possible sale, said that a final agreement has not yet been reached. Brandt said, “A deal has been reached in principle, but the deal is still being negotiated.” The OmniTRAX offer is $5.75 million, but approximately $4 million will need to be spent on back taxes.
The SLG is a former Iowa Pacific holdings property, and the line has been operating in bankruptcy for the past three years. OmniTRAX is associated with the Broe Real Estate Group in Denver, and specializes in freight logistics and shipping.
The Courier also is reporting that North Central Railcorp, a short line operator based in New Mexico, also may be interested in acquiring the SLRG. Brandt said that North Central signed a letter of intent last year but, to this point, had not obtained financing to purchase the railroad. Moreover, Brandt said when OmniTRAX made its offer, the company ceased negotiations with other bidders.
If OmniTRAX and SLG can reach an agreement, it will be submitted to the bankruptcy court, with a hearing expected sometime in October.
RT&S will continue to follow and report on this story as developments warrant.
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