Business
FreightCar America, Inc. Announces Agreement to Issue Non-Convertible Preferred Stock to Reduce Debt and Provide Growth Capital
Company enhances capital structure Proceeds to eliminate existing term loan debt and delayed draw facility, and provide additional capital to support next
About this update from Freightcar America, Inc.
[{"type":"text","content":"Company enhances capital structure Proceeds to eliminate existing term loan debt and delayed draw facility, and provide additional capital to support next phase of growth CHICAGO, March 27, 2023 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (Nasdaq: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer of railroad freight cars, today announced the entry into an agreement to issue new non-convertible preferred stock (the “Preferred”) to its current financial partner. The issuance is expected to occur on May 22, 2023 and the proceeds will be used to repay in-full the Company’s outstanding term loan debt, provide additional working capital and enhance the Company’s future operating cash flows to invest in growth initiatives. Highlights: Company will issue approximately 85,000 shares of new non-convertible preferred stock to its current financial partner at a purchase price of $1,000 per share.Proceeds of the Preferred will be used to retire the outstanding term loan debt.The remaining balance of the funds from the Preferred will be used to support further expansion of the Castaños footprint and new growth initiatives.As a result of the refinancing, the Company expects approximately $10 million of improvement in annual operating cash flows due to savings on its asset-based lending (ABL) facility and deferred cash dividends. Mike Riordan, Chief Financial Officer of FreightCar America, commented, “Given the significant progress and momentum of our business, we’ve taken an important first step in the reshaping of our capital structure through today’s transaction. This transaction significantly improves our balance sheet, lowers our interest costs and generates additional operating cash flow, allowing us to continue to invest in the business. Demand for our railcars is strong and this transaction supports the next increment of our planned growth.” For additional information about the Preferred, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed today with the Securities and Exchange Commission. About FreightCar America FreightCar America, Inc. is a diversified manufacturer of railroad freight cars, that also supplies railcar parts and leases freight cars through its FreightCar America Leasing Company subsidiaries. FreightCar America designs and builds high-qualit...