Greenbrier increase investments in Brazil
The Greenbrier Companies, Inc. has increased its ownership of Amsted-Maxion Equipamentos E Serviços Ferroviários S.A. (Greenbrier-Maxion) from 19.5% to 60%.
Located near São Paolo, Brazil, Greenbrier-Maxion is the leading South American railcar manufacturer, with more 60% share of new railcar production in Brazil. The company also offers a range of aftermarket services including railcar overhaul and refurbishment to address an aging railcar fleet, with more than 60% of the fleet at 30 years of age or older.
Greenbrier’s $20m investment will be used to retire debt at Greenbrier-Maxion thereby reducing interest payments by $4m annually. The purchase option dates to May 2015 when Greenbrier obtained its initial 19.5% ownership of Greenbrier-Maxion.
With the option exercise, the equity interest of Amsted-Maxion Fundição E Equipamentos Ferroviários S.A. (Amsted-Maxion Cruzeiro) will be reduced from 80.5% to 40%. Simultaneously with the closing of its investment into Greenbrier-Maxion, Greenbrier will increase its ownership stake in Amsted-Maxion Cruzeiro from 19.5% to 24.5% for $3.25m.
Based in Cruzeiro, Brazil, Amsted-Maxion Cruzeiro is a manufacturer of various castings and components for railcars and other heavy industrial equipment. Cruzeiro is well-integrated with the operations of Greenbrier-Maxion and draws on the experience of Amsted Rail, with whom Greenbrier currently partners in a US-based castings facility.
Proceeds from Greenbrier’s increased ownership in Cruzeiro, along with loans from the partners, will reduce interest costs by approximately $3m per year. Greenbrier will retain an option to increase its ownership in Amsted-Maxion Cruzeiro to 29.5% subject to certain conditions.
With an enhanced ownership position in both companies, Greenbrier expects to enjoy greater benefits from the expected economic growth and infrastructure development in Brazil. When completed, Greenbrier’s investments in Greenbrier-Maxion and Amsted-Maxion Cruziero will improve the capital structure of both companies, positioning each business for growth.
For more information visit www.gbrx.com
13th March 2017
