CALGARY — Canadian Pacific Railway Limited and Borealis Infrastructure Management Inc. announced that they have entered into a transaction that, subject to regulatory approval, will change their joint ownership of the Detroit River Tunnel Partnership (DRTP) to a majority position for Borealis.
CP retains its exclusive right to operate and maintain the Detroit River tunnel; however, CP’s interest will decrease to 16.5 per cent from 50 per cent with the completion of this transaction. CP’s proceeds from the transaction will be $110 million plus additional proceeds of $22 million based on future freight volume through the tunnel.
The DRTP owns the Detroit River Rail Tunnel which carries CP’s rail line from Windsor to Detroit. The tunnel, which transports rail traffic across the Canada-US border, is a vital link in the North American transportation infrastructure.
“I am pleased with the latest development in our long-standing 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.”
“The Detroit River Tunnel is an investment that fits into our long-term strategy of securing infrastructure assets that can generate stable and sustainable returns for OMERS plan members,” commented OMERS President and CEO Michael Nobrega.