LAKE OSWEGO, Ore., April 5, 2017 /PRNewswire/ -- The Greenbrier
Companies, Inc. (NYSE: GBX) and Tokyo-based MUL today announced execution of a
Memorandum of Understanding (MOU) to substantially expand the
parties' existing commercial relationship in North America. MUL intends to grow its
portfolio from 5,000 railcars to a total of 25,000 railcars over
the next four years. The MOU includes a multi-year purchase
commitment by MUL for 6,000 newly-manufactured railcars from
Greenbrier through 2020. Further, MUL has committed to obtain all
its newly-manufactured railcars exclusively from Greenbrier through
2023. In addition to the new equipment ordered, over the next
few years, MUL will supplement its portfolio growth through a
combination of lease syndications and used equipment owned and
originated by Greenbrier. The combined value of the
transaction announced today exceeds $1
billion.
In 2014, Greenbrier and MUL collaborated on a railcar lease
syndication and asset management partnership designed to establish
MUL as a leading owner and lessor of railcar assets in North
America. Under this arrangement, Greenbrier has syndicated
and sold to MUL nearly 5,000 new and used, leased railcars, which
Greenbrier currently manages.
The MOU provides that the parties will form a new asset
management service entity, owned 50% by each company, solely for
railcars in the MUL fleet. The 5,000 cars currently managed by
Greenbrier will be managed by this new entity. Greenbrier
will receive fee income from MUL related to its railcar asset
management services.
"Greenbrier's business relationship with MUL continues to
flourish as we focus on mutually beneficial transactions to achieve
our respective business goals. The MOU we announced today
advances Greenbrier's well-established strategy to reduce the
amount of long-term capital invested in our Leasing & Services
business as we drive greater transaction volume through our lease
underwriting, syndication and asset management model. From modest
beginnings, Greenbrier has evolved a very successful, asset-light
leasing and asset management business that today manages over
265,000 railcars and completed over $1.2
billion in lease syndications during the last two years,"
said William A. Furman, Chairman and
CEO.
MUL President & CEO Tadashi
Shiraishi said, "MUL is committed to growing our investment
in railcars to serve the North American freight rail market.
We have set an ambitious target to increase MUL's market share to a
level that places it among North
America's top 8 leading operating lessors of railcars.
MUL selected Greenbrier as the exclusive builder of new railcars
for our fleet because of Greenbrier's well-established reputation
for building high quality freight railcars. MUL has also
secured access to Greenbrier's proficiency in railcar management
through the formation of a new enterprise that will serve as the
sole provider of railcar management supporting MUL's rapidly
expanding fleet."
Furman concluded, "MUL is a good and trusted partner, joining
other Greenbrier syndication partners and industry customers who
buy our railcars and access various services supplied through our
integrated services model. Under this model, Greenbrier assumes
fiduciary duties including management of complex information with
firewall protections to ensure complete customer
confidentiality. We value the optimism and long-term view
that MUL brings with its approach to the freight car markets.
We appreciate the opportunity to extend our business relationship
with MUL into the next decade and we are pleased to support U.S.
rail industry jobs through this new investment."
The agreements discussed in this release, including the sale of
new and used railcars, are subject to agreement on remaining terms
and completion of documentation, and other customary
conditions.
About Greenbrier
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading
international supplier of equipment and services to freight rail
transportation markets. Greenbrier designs, builds and markets
freight railcars in North America
and Europe. We also build and market marine barges in North
America. We manufacture freight railcars and rail castings in
Brazil through a strategic
partnership. Through our European manufacturing operations, we
recently began delivery of U.S.-designed tank cars to Saudi Arabia. In October 2016, we entered into an agreement with
Astra Rail Management GmbH to form a new company, Greenbrier-Astra
Rail, which will create an end-to-end, Europe-based freight railcar manufacturing,
engineering and repair business. We expect this combination to be
completed during 2017. We are a leading provider of wheel services,
parts, leasing and other services to the railroad and related
transportation industries in North
America and a supplier of freight railcar repair,
refurbishment and retrofitting services in North America through a joint venture
partnership with Watco Companies, LLC. Through other joint
ventures, we produce rail castings, tank heads and other railcar
components. Greenbrier owns a lease fleet of over 8,000 railcars
and performs management services for over 266,000 railcars.
About MUL
Mitsubishi UFJ Lease & Finance Company Limited (MUL) is a
prominent global leasing company headquartered in Tokyo, Japan. MUL, incorporated in
April 1971, focuses on leasing,
installment sales, various types of financing, and international
business. MUL's principal shareholders are Mitsubishi Corporation,
Mitsubishi UFJ Financial Group, Inc. MUL is publicly listed on the
Tokyo Stock Exchange (TSE: 8593) and the Nagoya Stock Exchange
(NSE: 8593).
As one of the industry's leading companies, MUL's business
extends beyond conventional leasing and finance, with the company
offering a wide variety of services including eco-and
energy-related services, real estate, medical and long-term care
services, overseas market-entry support, used equipment trading
business and global asset business.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: This press release may contain
forward-looking statements, including any statements that are not
purely statements of historical fact. Greenbrier uses words such as
"anticipates," "believes," "forecast," "potential," "goal,"
"contemplates," "expects," "intends," "plans," "projects," "hopes,"
"seeks," "estimates," "strategy," "could," "would," "should,"
"likely," "will," "may," "can," "designed to," "future,"
"foreseeable future" and similar expressions to identify
forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from the results contemplated by the forward-looking
statements. Factors that might cause such a difference
include, but are not limited to, reported backlog and awards that
are not indicative of Greenbrier's financial results; uncertainty
or changes in the credit markets and financial services industry;
high levels of indebtedness and compliance with the terms of
Greenbrier's indebtedness; write-downs of goodwill, intangibles and
other assets in future periods; sufficient availability of
borrowing capacity; fluctuations in demand for newly manufactured
railcars or failure to obtain orders as anticipated in developing
forecasts; loss of one or more significant customers; customer
payment defaults or related issues; policies and priorities of the
federal government regarding international trade and
infrastructure; sovereign risk to contracts, exchange rates or
property rights; actual future costs and the availability of
materials and a trained workforce; failure to design or manufacture
new products or technologies or to achieve certification or market
acceptance of new products or technologies; steel or specialty
component price fluctuations and availability and scrap surcharges;
changes in product mix and the mix between segments; labor
disputes, energy shortages or operating difficulties that might
disrupt manufacturing operations or the flow of cargo; production
difficulties and product delivery delays as a result of, among
other matters, costs or inefficiencies associated with expansion,
start-up, or changing of production lines or changes in production
rates, changing technologies, transfer of production between
facilities or non-performance of alliance partners, subcontractors
or suppliers; ability to obtain suitable contracts for the sale of
leased equipment and risks related to car hire and residual values;
integration of current or future acquisitions and establishment of
joint ventures; succession planning; discovery of defects in
railcars or services resulting in increased warranty costs or
litigation; physical damage or product or service liability claims
that exceed Greenbrier's insurance coverage; train derailments or
other accidents or claims that could subject Greenbrier to legal
claims; actions or inactions by various regulatory agencies
including potential environmental remediation obligations or
changing tank car or other railcar or railroad regulation; and
issues arising from investigations of whistleblower complaints; all
as may be discussed in more detail under the headings "Risk
Factors" and "Forward Looking Statements" in Greenbrier's Annual
Report on Form 10-K for the fiscal year ended August 31, 2016 and Greenbrier's Quarterly Report
on Form 10-Q for the fiscal quarter ended November 30, 2016, and Greenbrier's other reports
on file with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date
hereof. Except as otherwise required by law, Greenbrier does
not assume any obligation to update any forward-looking
statements.
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SOURCE The Greenbrier Companies, Inc. (GBX)