Globe says Teachers' investment gives RailPower a boost

2008-05-27 07:17 ET - In the News

The Globe and Mail reports in its Tuesday edition that Ontario Teachers' Pension Plan, which injected a lifesaving $35-million into hybrid locomotive maker RailPower Technologies in January, has ponied up another $20-million. The Globe's Richard Blackwell writes the money will help the company build a new factory in Quebec. RailPower has been subcontracting most assembly work in the United States, and much of that will be shifted to the new facility at Saint-Jean-sur-Richelieu, east of Montreal. "What we want to do is regain control of quality and costs and delivery," said RailPower chief executive officer Jose Mathieu. Some preparation work on the locomotives will still be outsourced, but key assembly will be done on site. The plant is expected to be open by mid-January 2009, with the first locomotives leaving the facility by next spring. Teachers' investment is in the form of a convertible debenture, the same way it put money into the company in January. If both debentures are eventually converted, Teachers would own about 75 per cent of RailPower. Analysts say RailPower's challenge is to find more buyers for its products. RailPower shares jumped 35 cents Monday to 75 cents in Toronto.