Icahn Enterprises L.P. Announces Definitive Agreement to Sell American Railcar Leasing LLC
20 December 2016 - 4:00AM
Icahn Enterprises L.P. (NASDAQ:IEP) today announced entrance into a
definitive agreement to sell its indirectly wholly-owned subsidiary
American Railcar Leasing LLC (“ARL”) to SMBC Rail Services LLC
(“SMBC Rail”), a wholly-owned subsidiary of Sumitomo Mitsui Banking
Corporation, for cash based on (i) an enterprise value of $2.778
billion (subject to certain adjustments) and (ii) a fleet of
approximately 29,000 railcars. The initial closing is expected to
occur in the second quarter of 2017. For a period of three years
thereafter, upon satisfaction of certain conditions, the sellers
will have an option to sell, and SMBC Rail will have an option to
buy, approximately 4,800 additional railcars. If the conditions to
the option are satisfied, the purchase price for the approximately
4,800 additional railcars would be approximately $586 million at
the time of the initial closing, which would bring the total sale
price to $3.364 billion (subject to certain adjustments).
The sale is subject to customary closing
conditions, including the expiration or termination of applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act. Neither the sale nor the option are subject to any
financing condition.
Carl C. Icahn, Chairman of Icahn Enterprises,
stated: “I have been in the railcar business for over 30 years.
During that time we have built one of the leading railcar fleets in
the world. In fact, if lined up, ARL’s fleet would stretch
from New York City to the middle of Ohio. I am very proud of
the business we have built at ARL and am pleased that SMBC Rail
Services also sees the tremendous value in this business.
This transaction is a good example of how Icahn Enterprises
delivers substantial returns for our equity holders.”
Deutsche Bank Securities Inc. is acting as
exclusive financial advisor and Thompson Hine LLP is acting as
legal counsel for American Railcar Leasing LLC in connection with
the sale.
Icahn Enterprises L.P. (NASDAQ:IEP), a master
limited partnership, is a diversified holding company engaged in
ten primary business segments: Investment, Automotive, Energy,
Metals, Railcar, Gaming, Mining, Food Packaging, Real Estate and
Home Fashion.
Caution Concerning Forward-Looking
Statements
This release contains certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, many of which are beyond our ability to control
or predict. Forward-looking statements may be identified by words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected
future business and financial performance of Icahn Enterprises L.P.
and its subsidiaries, including the expected closing of the sale of
American Railcar Leasing LLC and satisfaction of the conditions for
exercising the option at the time of the initial closing or
otherwise. Among these risks and uncertainties are risks related to
economic downturns, substantial competition and rising operating
costs; risks related to our investment activities, including the
nature of the investments made by the private funds in which we
invest, losses in the private funds and loss of key employees;
risks related to our automotive activities, including exposure to
adverse conditions in the automotive industry, and risks related to
operations in foreign countries; risks related to our energy
business, including the volatility and availability of crude oil,
other feed stocks and refined products, unfavorable refining margin
(crack spread), interrupted access to pipelines, significant
fluctuations in nitrogen fertilizer demand in the agricultural
industry and seasonality of results; risk related to our gaming
operations, including reductions in discretionary spending due to a
downturn in the local, regional or national economy, intense
competition in the gaming industry from present and emerging
internet online markets and extensive regulation; risks related to
our railcar activities, including reliance upon a small number of
customers that represent a large percentage of revenues and
backlog, the health of and prospects for the overall railcar
industry and the cyclical nature of the railcar manufacturing
business; risks related to our food packaging activities, including
competition from better capitalized competitors, inability of its
suppliers to timely deliver raw materials, and the failure to
effectively respond to industry changes in casings technology;
risks related to our scrap metals activities, including potential
environmental exposure; risks related to our real estate
activities, including the extent of any tenant bankruptcies and
insolvencies; risks related to our home fashion operations,
including changes in the availability and price of raw materials,
and changes in transportation costs and delivery times; and other
risks and uncertainties detailed from time to time in our filings
with the Securities and Exchange Commission. Past performance in
our Investment segment is not necessarily indicative of future
performance. We undertake no obligation to publicly update or
review any forward-looking information, whether as a result of new
information, future developments or otherwise.
Investor Contacts:
SungHwan Cho, Chief Financial Officer
(212) 702-4300
Icahn Enterprises (NASDAQ:IEP)
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