PANAMA: AP Moller-Maersk’s APM Terminals division has bought the Panama Canal Railway Co from a 50:50 joint venture of Canadian Pacific Kansas City and crane manufacturer Lanco Group/Mi-Jack.
PCRC was formed in 1998 when it was awarded a government concession to rehabilitate the moribund 76 km railway adjacent to, and pre-dating, the Panama Canal between the Atlantic and Pacific oceans. The line linking Balboa with Colon was converted from 1 524 mm to 1435 mm gauge, and operations restarted in 2001. It now carries double-stack container traffic, as well as a passenger service. In 2024 PCRC generated revenue of US$77m and EBITDA of US$36m.
Announcing the sale on April 2, CPKC President & CEO Keith Creel said AP Moller-Maersk is a key strategic partner for CPKC and major customer of PCRC. He said ‘the sale of this non-core asset creates value for our shareholders and reflects our commitment to optimise our assets as we focus on growing our core North American rail business through our unrivalled three-nation network connecting Canada, the United States and Mexico’.
APM Terminals CEO Keith Svendsen said ‘PCRC represents an attractive infrastructure investment in the region aligned to our core services of intermodal container movement. The company is highly regarded for its operational excellence and will provide a significant opportunity for us to offer a broader range of services to the global shipping customers we serve.’
BofA Securities and Lazard Frères & Co served as financial advisers to PCRC, CPKC and Lanco Group/Mi-Jack, and Sullivan & Cromwell as legal counsel.