Investors Stake $250 Million in Pathnet

Posted: 01/2000

Investors Stake $250 Million in Pathnet

Pathnet (www.pathnet.com), a carrier’s
carrier for second- and third-tier U.S. markets, has announced investment
contracts with Colonial Pipeline Co. (www.colpipe.com),
Burlington Northern Santa Fe Corp. (www.bnsf.com
) and CSX Corp. (www.csx.com) valued at $250
million. As part of the agreements, Pathnet will receive the right to develop
more than 12,000 miles of the investors’ right-of-way holdings.

Each of the companies is contributing various levels of rights of way at
values based on the routes. In addition to providing a portion of rights-of-way
access, Colonial Pipeline also will make a $63 million cash investment in
Pathnet, with investors collectively receiving about a one-third equity stake in
Pathnet and proportionate representation on the company’s board of directors.

Pathnet expects the transactions to close as soon as it obtains regulatory
and other required approvals.