Railroad operator Genesee & Wyoming Inc said it intends to halt operations at its unit Huron Central Railway Inc due to the economic downturn.
The downturn has caused Huron's traffic to decline substantially over the last 12 months, to the point that the railroad is not economically viable to operate for the long term, the company said in a statement.
Genesee expects to cut 45 jobs and record charges in the second-quarter of up to about $5.3 million, or 15 cents a share, on account of the closure.
Huron Central, which reduced Genesee's 2008 earnings by about 4 cents share, will cease operating between McKerrow and Sault Ste. Marie on Aug 15 2009.
It will continue operation from Sudbury to McKerrow and Espanola until Oct 31 2009, the company said.
Separately, Genesee said it has commenced a public offering of 4 million shares of its common stock. Citi, J.P.Morgan and Deutsche Bank Securities will be joint book-running managers for the offering, the company said.
(Reporting by Eric Yep in Bangalore; Editing by Jarshad Kakkrakandy)