Interpool to Sell Majority of Container Operating Lease Assets to Investor Group; Interpool Will Manage the Portfolio and Conti
March 15 2006 - 6:00AM
Business Wire
Interpool, Inc. (NYSE: IPX) announced that its wholly-owned
subsidiary, Interpool Containers Limited ("ICL"), has entered into
an agreement to sell a substantial majority of its operating lease
portfolio of standard dry marine cargo containers to a newly formed
subsidiary of an investor group based in Switzerland. Following the
sale, Interpool and its 50%-owned subsidiary, Container
Applications International, Inc. ("CAI"), will perform management
services on behalf of the purchaser for the containers being sold,
and Interpool will continue its active businesses of leasing cargo
containers and container chassis to shipping lines and other
customers. Interpool's container sale involves a total of
approximately 273,000 standard dry marine cargo containers owned by
ICL, as well as an assignment of all of ICL's rights under existing
leases for this equipment. The purchase price is approximately $515
million, which is expected to result in an after-tax gain for
Interpool of approximately $58-62 million during the first quarter
of 2006, subject to closing adjustments and final accounting
review. Interpool and CAI have entered into a management agreement
with the purchaser whereby they will continue to interface with
their customers and will provide long term management services,
including billing, collecting, lease renewal, operations and
disposition activities for the sale portfolio, for a management
fee. The container sale is expected to close on March 31, 2006. ICL
intends to use the proceeds of the sale to reduce indebtedness and
for general corporate purposes, including the acquisition of
additional containers for finance and operating leases. The sale
agreement does not restrict any future activities that may be
engaged in by Interpool or ICL, and Interpool stated that it
intends to continue its active container leasing business through
ICL. The obligations of the purchaser under the sale agreement are
subject to the completion of necessary financing arrangements.
Interpool said that the purchaser has received a commitment letter
from a financial institution, subject to customary closing
conditions. Both Interpool and the purchaser have agreed to place
the amount of $10 million on deposit with an escrow agent to secure
their obligations under the sale agreement. Martin Tuchman,
Interpool's Chairman of the Board and Chief Executive Officer said,
"This transaction represents a significant step in our plan to
position our company to further enhance shareholder value. It
provides an additional source of capital and an opportunity to
reduce debt, improve our capital structure and reduce the cost of
future financings. Following this transaction and the cash
distribution made by our foreign subsidiary to the parent company
in December, we will be extremely well positioned to take advantage
of strategic opportunities at the parent company level and to
increase our investment in chassis for the expanding maritime, rail
and domestic trucking markets. And, with our excellent
relationships with customers in the container leasing markets, we
intend to continue to invest in the container finance and operating
lease sectors as we have in the past." In light of this
transaction, and to allow additional time for Interpool to complete
its financial statements and for Interpool management to complete
its evaluation of internal controls as of December 31, 2005,
Interpool plans to file a notice with the Securities and Exchange
Commission to obtain a 15 calendar day extension of the deadline
for the Company to complete and file its 2005 Annual Report on Form
10-K. Interpool expects to have the Form 10-K completed and filed
prior to the extended deadline of March 31, 2006. Interpool will
hold a conference call on Wednesday, March 15, 2006 at 11:30 a.m.
Eastern Standard Time to discuss the container sale. Interested
investors should call 1-888-889-5602 ten minutes prior to the time
of the conference call. Callers from outside North America please
call 1-973-582-2734 and hold for an operator. Identify yourself and
your company and inform the operator that you are participating in
the Interpool Container Sale Conference Call. If you are unable to
access the Conference Call at 11:30 a.m. EST, please call
1-877-519-4471 to access the taped digital replay. To access the
replay, please call and enter the digital PIN 7161341. This replay
will first be available at 2:00 p.m. EST, March 15, 2006 and will
be available until 2:00 p.m. EDT, April 15, 2006. Investors will
also have the opportunity to listen to the Conference Call live at
the company's web site www.interpool.com. To listen to the live
call via the Internet, please go to the web site at least fifteen
minutes early to register, download, and install any necessary
audio software. For those who cannot listen to the live web cast, a
replay will be available two hours after the call is completed and
will remain available for thirty days. Interpool is one of the
world's leading suppliers of equipment and services to the
transportation industry. The company is the world's largest lessor
of intermodal container chassis and a world-leading lessor of cargo
containers used in international trade. Note: This press release
and other press releases and information can be viewed at the
Company's website at www.interpool.com. This Press Release contains
certain forward-looking statements regarding future circumstances.
These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements,
including in particular the risks and uncertainties described in
the company's SEC filings. The Company undertakes no obligation to
publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof.
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