HOLDERS of Wisconsin Central Transportation Corp stock failed to rally in sufficient numbers around the flag raised by deposed President & CEO Ed Burkhardt. Propositions that would have seen control of the company pass to Burkhardt’s team were supported by holders of only 32·7% of the equity. However, propositions that required all directors to be re-elected at every AGM passed by 52%.
Tom Power, the current President & CEO, said WCTC was ’continuing to make good progress with our exploration of strategic alternatives, and with this expensive and time consuming distraction behind us, we can move forward even more aggressively.’ Prominent among these strategies is the disposal of WCTC’s 42·5% equity in English Welsh & Scottish Railway, 24% in Tranz Rail in New Zealand, and 33% in ATN (Tasmania). Accounts for the nine months to September 30 2000 show net income from the group’s North American operations at $33·5m. In sharp contrast, WCTC’s share of net income earned by the three overseas railways was a mere $1·6m, admittedly after deducting $9·1m in provisions.
Power condemned as ’absolutely false’ Burkhardt’s assertion that efforts to sell WCTC’s stake in EWS had been cancelled. WCTC confirmed on January 18 that Goldman Sachs was still issuing information on EWS to qualified bidders, although this must make gloomy reading in view of the unprecedented disruption to train operations since a broken rail caused four deaths at Hatfield on October 17 (p92). However, German Railway and French National Railways are rumoured to have started talks.
In New Zealand, where Fay, Richwhite - which holds 14% of Tranz Rail - launched a joint sale with WCTC last November, modest to low levels of interest are reported in the various freight and passenger operations being offered as discrete entities.
In view of what looks remarkably like a fire sale, there was considerable surprise when Wisconsin’s Vice-President, Corporate Development, Jim Fisk told a meeting in London on January 10 that his company was still interested in acquiring a stake in Jordan’s 292 km Aqaba Railway, and also in securing a slice of Polish freight - when the government ’makes up its mind’ about exactly what terms are on offer. Fisk assured us that Aqaba was ’still active’ despite the withdrawal of Norsk Hydro from the El Shidya phosphate development that would have required a new 22 km branch line (RG 10.99 p629). ’Wisconsin still has advisers in place’, he said, ’but we have not yet closed the deal.’