Lake Oswego, Ore.-based railcar supplier Greenbrier Cos. will receive a $75 million term loan from New York investment firm WL Ross & Co. LLC, allowing the company to pay down debt and prepare for future industry growth. The two parties continue to discuss a possible increase in the loan’s size, to $150 million.
In return, Greenbrier has issued warrants to WL Ross to purchase 3.4 million shares, amounting to a company stake of 17% stake, with a $6 “strike price,” or roughly a 25% discount to the stock’s closing price Wednesday. WL Ross will also buy at least $1.5 million in stock.
The squeeze on railway suppliers already has forced Greenbrier Cos. to slash its dividend and implement cost-cutting measures. Greenbrier Cos.also has diversified by pursuing other related businesses, including refurbishment and parts, leasing and services, and marine manufacturing. More than half of the company's revenue in its latest fiscal year came from outside railcar production.
Shortly before noon Thursday, shares of Greenbrier Cos. traded at $8.33, up 4.52%.