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The Watco Cos. Inc. recently agreed to sell the 158-mile Appalachian and Ohio Railroad (A&O) to Four Rivers Transportation Inc. Terms weren’t disclosed.

In March 2005, Watco launched the A&O to operate a line between Grafton and Cowen, W.Va., that the holding company leased from CSX Transportation. During the past year, Watco — which owns 16 short lines operating in 14 states — increased the short line’s carloads about 20 percent primarily by moving more coal from West Virginia mines to eastern U.S. end users.

“Unfortunately, the terms of the lease would not allow Watco to reach an acceptable level of profitability,” said Watco Chief Executive Officer Rick Webb in a prepared statement.

Four Rivers Transportation also owns the 300-mile Paducah & Louisville Railway Inc. and 124-mile Evansville Western Railway Inc., which the holding company launched in December 2005 after leasing a CSXT line between Mt. Vernon, Ind., and Okawville, Ill.

“Four Rivers has been looking for opportunities for growth for the last several years,” said Four Rivers President and CEO Tony Reck. “We have considerable experience in the transportation of coal and saw the A&O as a good chance to become involved in the Appalachian coal market.”