PITTSBURGH, Feb. 27 /PRNewswire-FirstCall/ -- Pittsburgh-based L.B. Foster
Company (Nasdaq: FSTR), announced today that the Federal Railroad
Administration ("FRA") has rejected the application of the Dakota, Minnesota &
Eastern Railroad ("DM&E") for a loan of approximately $2.33 billion to build
and rehabilitate approximately 860 miles of railroad in three states.
The FRA acknowledged that the DM&E's application met virtually all of the
applicable criteria for such loans, including enhancing public safety,
promoting economic development, alleviating rail capacity problems in shipping
coal out of the Powder River Basin, and enhancing rail service to small
communities, especially in South Dakota and Minnesota. Despite these many
benefits, the FRA concluded ... "that there is an unacceptable degree of risk
with regard to the project and too high a risk concerning whether the
obligations can reasonably be repaid ... "
Kevin Schieffer, President & CEO of the DM&E, yesterday stated:
"While DM&E is disappointed in the Federal Railroad Administration's
decision denying our loan application, we expect to move forward and will
spend some time assessing alternatives to accomplish that objective. This
project is too important to the future of our company, regional rail
transportation and the many supporters in the agriculture and energy
sectors, the communities we serve, and beyond who are relying on it."
L.B. Foster Company owns approximately 13.4% of the DM&E's diluted common
stock, approximately $8.8M of DM&E preferred stock and, as of December 31,
2006, $7.7M in receivables accrued on this preferred stock. Despite the FRA's
rejection of the DM&E's loan application, the Company believes that the total
value of its investment in the DM&E significantly exceeds the sum of these
L.B. Foster Company is a leading manufacturer, fabricator and distributor
of products for rail, construction, utility and energy industries. The
company can be reached via telephone at 412-928-3400 or 1-800-255-4500 and
through its website, www.lbfoster.com.
* Statements or beliefs on the value of the DM&E are forward looking
statements and are subject to numerous contingencies and risk factors.
Readers are encouraged to refer to L.B. Foster Company's report on Form 10-K
for the year ending December 31, 2005, as well as other documents filed with
the Securities and Exchange Commission by L.B. Foster Company.
SOURCE L.B. Foster Company
/CONTACT: Jake Fuellhart of L.B. Foster Company, +1-412-928-5645, or
/Web site: http://www.lbfoster.com/
CO: L.B. Foster Company; Dakota, Minnesota & Eastern Railroad; Federal
IN: CST TRN UTI
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9316 02/27/2007 15:01 EST http://www.prnewswire.com