WL Ross & Co. Invests In Greenbrier
The railcar maker will receive a $75 million secured loan from the bankruptcy investor.
June 16, 2009
Even as many investors are looking to protect their current investments, WL Ross & Co. has embarked on a unique investment in The Greenbrier Companies, the Lake Oswego-based railroad car manufacturer.
The investment firm headed by bankruptcy investor Wilbur L. Ross, Jr. devoted $75 million in debt to the ailing freight train maker. The investment, containing no financial covenants, is a big win for Greenbrier as it struggles to pay down its sizable debt load.
Meanwhile, Ross has hedged his losses by investing entirely in debt, allowing him to control the company’s assets in the case of a bankruptcy. With approval from WL Ross, the three-year loan may be upped to $150 million, enabling Greenbrier to finance “select growth opportunities,” such as its recent diversification efforts into refurbishing freight trains, parts, leasing and services.
The transaction will place Wendy Teramoto on Greenbrier's board. Teramoto is a WL Ross senior vice president who followed Ross after he left Rothschild Inc. to launch his namesake firm. The bankruptcy investor will buy at least $1.5 million of Greenbrier stock.
In January, Ross agreed to purchase a controlling stake in First Bank and Trust Company of Indiantown, a Florida community bank, for $7.3 million.
Greenbriar struggling to maintain profitability, saw lawmakers come to its aid today when 17 members of Congress wrote to General Electric Co. chief executive Jeffrey Immelt discouraging GE’s plans to back out of a $1.2 billion contract signed with Greenbriar in 2007. Previously, GE signed an agreement to purchase 11,900 railroad cars from Greenbrier.
Last week, Greenbrier elected Victoria McManus, the former head of Babcock & Brown's North American rail group, to its board.
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