Revamping for Success: FreightCar America Inc. Strikes Deal to Retire Preferred Shares with Fresh Term Loan
New financing arrangement reduces Company’s cost of capital by approximately 40%
Further enhances financial flexibility, cash generation, and ability to support growth strategy
CHICAGO, Jan. 06, 2025 (GLOBE NEWSWIRE) — FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer and supplier of railroad freight cars, railcar parts, and components, today announced it has completed a new term loan facility. The proceeds from the term loan will be used to redeem all outstanding shares of Series C Preferred Stock, as well as settle all related accrued dividends.
FreightCar America Inc. has made a strategic move to retire its Preferred Shares through a fresh term loan, marking a significant milestone for the company’s financial restructuring journey. This decision not only reduces the cost of capital by approximately 40% but also strengthens the company’s financial flexibility, cash generation capabilities, and overall ability to support its growth strategy.
By retiring the Preferred Shares and settling all related dividends, FreightCar America Inc. is streamlining its capital structure and optimizing its financial resources to drive long-term value for its shareholders. This move demonstrates the company’s commitment to enhancing shareholder value and maximizing returns on investment.
This strategic financing arrangement reflects FreightCar America Inc.’s proactive approach to managing its capital structure and pursuing opportunities for sustainable growth and profitability. By leveraging the new term loan facility, the company is positioning itself for continued success in the dynamic and competitive railroad freight car industry.
How will this affect me?
As an investor or stakeholder in FreightCar America Inc., this development is positive news that signifies the company’s commitment to improving its financial health and creating value for its shareholders. The retirement of Preferred Shares and the reduction in the cost of capital are likely to have a favorable impact on the company’s stock performance and potential returns for investors.
How will this affect the world?
FreightCar America Inc.’s decision to retire Preferred Shares with a fresh term loan not only benefits the company and its stakeholders but also contributes to the stability and growth of the railroad freight car industry as a whole. By strengthening its financial position and enhancing its ability to support its growth strategy, FreightCar America Inc. is better equipped to meet the evolving needs of the industry and drive innovation and sustainability in rail transportation.
Conclusion
In conclusion, FreightCar America Inc.’s strategic move to retire Preferred Shares with a fresh term loan is a significant step towards revitalizing the company’s financial structure and positioning it for long-term success. The reduction in the cost of capital, enhanced financial flexibility, and strengthened growth strategy are all key elements of this transformative initiative that will benefit the company, its stakeholders, and the broader railroad freight car industry.
