ALAMOSA – The auction to purchase the San Luis Rio Grande (SLRG) railroad concluded in court on Thursday morning with a result that could not have been predicted several weeks ago.
Colorado Pacific Railroad, LLC, which submitted a bid to purchase the SLRG on November 5, ultimately came out on top with a winning bid of $10.7 million, beating out Big Shoulders Capital and OmniTRAX with an 86% increase over that company’s original bid of $5.7 million.
“The auction was very spirited,” said William Brandt, bankruptcy trustee. “This is great news. (This is) a responsible operator for the railroad in the valley. And given the value that was created in the auction, the creditors and the others will be thankful. There will be some money to pay bills.”
Stefan Soloviev is the owner of Colorado Pacific Railroad (CPRR), which currently owns the 156 miles of track in southeastern Colorado known as the Towner Line, running from the Kansas state line west to the interchange at N.A. Junction just east of Boone.
In addition to other holdings, Soloviev also has established significant acreage in production – both farming and livestock – in Kansas, Colorado and New Mexico. In support of his own investment and other ag producers in the region, several years ago, Soloviev invested significant resources in purchasing, resurrecting and rehabilitating the Towner line that, before he stepped in, was literally weeks away from being pulled up and scrapped for its high-quality steel tracks.
After the auction was concluded, Soloviev texted to the Courier, “I’m very pleased and very proud to be the new owner of the SLRG Railroad, implementing it with the CPRR and working with the people of Colorado on a personal level as I have since arriving in this region 23 years ago.
“This is just another piece to the larger part of creating the first ever vertically integrated agricultural business. From seed to farming to harvest to storage to rail to a dedicated port to vessel to end-user, wherever that end-user is in the world.
“I hope to take the people of Colorado and western Kansas on this journey with me that I started in Topeka, Kansas in 1999. I truly believe together we can be larger than Cargill, work together and change the grain business as we know it.”
When Brandt was told of Soloviev’s text, he responded, ““That will be music to everyone’s ears.”
Brandt then went on to reflect on the last three years.
“As a trustee for the railroad, I did the best that I could to obviously improve its service and its reliability and others. But when I was pitching potential customers for new business, I had to consider their viewpoint that a chapter 11 trustee is plugging the railroad. Why take that economic risk if the trustee has to do that?
“I think there are all kinds of people who have been waiting with baited breath to see some semblance of financial security put behind the railroad. I’m convinced, once that’s there, there will be some heavy growth in the valley. As people pick up on this and everybody knows what the future will be and how well heeled the purchaser is, I expect great things for both the railroad and the valley.”
The Valley Courier reached out to OmniTRAX for comment but had received no response by press time on Thursday.
A final decision will not be issued from the bankruptcy judge until November 28, during which time Brandt will submit his recommendation concerning the bidder. After that, the sale will have to go before the Surface Transportation Board for final approval, which is anticipated to likely take place shortly after the end of the year.