NEWS from
DM&E: Monday, July 29, 2002
Dakota, Minnesota & Eastern
Railroad Corporation
337 22nd Avenue South
* P.O. Box 178 * Brookings, SD 57006
605-697-2400/Fax
605-697-2499
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FOR IMMEDIATE RELEASE
(Sioux Falls, SD) – The Iowa, Chicago & Eastern Railroad Corporation (“IC&E”) – a wholly owned subsidiary of Cedar American Rail Holdings, Inc. – will begin operations of the 1,400-mile regional railroad formerly owned by I&M Rail Link, LLC (“IMRL”) effective at 12:01 a.m. Central Time tomorrow, Tuesday, July 30, 2002. Since its formation in 1997, the IMRL has experienced significant financial problems and has been unable to service its debt. After a difficult and complicated two-year process to negotiate the deal, finance the acquisition, and obtain regulatory approval, the deal finally closed into escrow late Friday night (July 26). IC&E will operate in five states (MN, IA, IL, MO, WI), with service to the Twin Cities, Chicago & Kansas City.
Cedar American President & Chief Executive Officer Kevin V. Schieffer said “we are all excited about having accomplished the acquisition, and the opportunities and challenges it brings both for IC&E and DM&E (its sister railroad, the Dakota, Minnesota & Eastern). But there will be time for celebration after we are absolutely certain that the transition has been fully accomplished with maximum benefit for the customers and employees. Right now, there is a lot of work to do for both railroads. And we are focused on getting it done.”
Schieffer said that within the coming months Cedar American will complete rebuilding of its new headquarters facility in Sioux Falls, undertake additional regulatory proceedings to complete the integration of IC&E and DM&E into a rail system managed under common control, begin marketing of new competitive route options for existing shippers, undertake to expand connections with other railroads, solicit new customers, and address dozens of employee organizational issues. “One of the biggest challenges is simply getting to know the expanded field of players. When these two railroads are combined under common control, the resulting rail system will be roughly triple the size of the current DM&E system. There is a great deal of work ahead. We welcome it, and are committed to react to any start-up transitional issue with promptness and accountability,” Schieffer said.
IC&E will maintain operational headquarters in the Quad Cities. DM&E will retain a corporate presence in Brookings. Both railroads will have dispatching and other services provided under contract with Cedar American, which will be headquartered in the former IBM Building in Sioux Falls, SD, which is undergoing a complete remodeling. The Sioux Falls office is currently functioning with Customer Service staff and will within the next week add additional accounting staff and other functions. With construction build-out expected to be completed in several months, subject to regulatory approval of the common control of the two railroads, it is hoped that the Sioux Falls office will be fully staffed before year’s end.
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