RailAmerica Commences Tender Offer for 12 7/8% Senior Subordinated Notes Due August 2010
BOCA RATON, Fla., Jan. 4 /PRNewswire/ -- RailAmerica, Inc. (NYSE: RRA), the world's largest operator of short line and regional freight railroads, today announced that its wholly owned subsidiary, RailAmerica Transportation Corp. (the "Company"), has commenced an offer to purchase for cash all of its outstanding 12 7/8% Senior Subordinated Notes due August 15, 2010, Series A and 12 7/8% Senior Subordinated Notes due August 15, 2010, Series B (collectively the "Notes"), and a solicitation of consents to certain proposed amendments to the indenture governing the Notes.

Assuming Notes validly tendered pursuant to the offer are accepted for payment by the Company, (a) if Notes are validly tendered pursuant to the offer and consents are validly delivered pursuant to the solicitation by January 18, 2002, and not validly withdrawn or revoked by the time the supplemental indenture is executed, total consideration of $1,100 (inclusive of a consent payment of $15) per $1,000 principal amount of Notes plus accrued and unpaid interest will be paid by the Company to holders of Notes who validly tender their notes and deliver consents, as more fully set forth in the Offer to Purchase and Consent Solicitation Statement, dated January 4, 2002; (b) if Notes are validly tendered pursuant to the offer and consents are delivered pursuant to the solicitation after January 18, 2002 and by February 4, 2002, and not validly withdrawn by the time the supplemental indenture is executed, tender offer consideration of $1,085 per $1,000 principal amount of Notes plus accrued and unpaid interest will be paid by the Company to holders of Notes who validly tender their Notes and deliver consents, as more fully set forth in the Offer to Purchase and Consent Solicitation Statement. No consent payment will be made in respect of notes tendered after 5:00 p.m., New York City time, on January 18, 2002.

The offer and the solicitation will expire at 5:00 p.m. on February 4, 2002, unless otherwise extended, but holders must tender their Notes and deliver consents on or prior to 5:00 p.m., New York City time, on January 18, 2002 to receive the consent payment described above, in addition to the tender offer consideration. As of today, there is $130,000,000 in aggregate principal amount of Notes outstanding.

The Company will not be required to purchase any of the Notes tendered nor pay any consent payments unless certain conditions have been satisfied, including valid tender of a majority in aggregate principal amount of the Notes at the time outstanding and the valid delivery of the accompanying consents, the execution and delivery of the supplemental indenture and the receipt by the Company of net proceeds from a debt financing. The full terms of the offer and the solicitation are set forth in the Company's Offer to Purchase and Consent Solicitation Statement, dated January 4, 2002, and in the related Consent and Letter of Transmittal.

This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents with respect to any of the Notes. The offer and the solicitation are being made solely by the Offer to Purchase and Consent Solicitation Statement, dated January 4, 2002, and the related Consent and Letter of Transmittal. Questions regarding the offer and the solicitation may be directed to UBS Warburg LLC, the dealer manager and solicitation agent for the offer and the solicitation, at (203) 719-8035 (call collect) or D.F. King & Co., Inc., the information agent for the offer and the solicitation, at (212) 269-5500 (call collect) or toll-free at (800) 628-8536.