OREANDA-NEWS. October 02, 2015. GE [NYSE:GE] announced today that it has reached separate agreements to sell its tank car fleet assets and railcar repair facilities to Marmon Holdings, Inc., and its remaining railcar leasing business, General Electric Railcar Services LLC, to Wells Fargo & Co. [NYSE:WFC]. Terms of the transactions are not being disclosed.

“These transactions are another example of the value generated by GE Capital’s strong businesses and exceptional teams as we continue to demonstrate speed and execute on our strategy to sell most of the assets of GE Capital,” said Keith Sherin, GE Capital chairman and CEO. “We expect to be substantially done with our exit strategy by the end of 2016,” he added.

GE Railcar Services leases a broad range of railcars as well as locomotives to shippers and railroads across North America.

“We’re pleased to sell our railcar business and, separately, our tank car fleet and railcar repair shops, to buyers that are long-term players in the industry committed to expanding the businesses,” said Sherin.

As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that market conditions are favorable to pursue disposition of these assets. GE Capital will retain the financing “verticals” that relate to GE’s industrial businesses.

The sale of the tank car assets is effective immediately and closed today. The sale of the railcar repair facilities is expected to close in the fourth quarter of 2015. The sale of the remaining railcar leasing business is subject to customary regulatory and other approvals and is expected to close by the end of the first quarter of 2016.

When completed, the Rail transactions, which represent about \\$4.0 billion of ending net investment , will contribute approximately \\$1.3 billion of capital to the overall target of approximately \\$35 billion of dividends expected to GE under this plan (subject to regulatory approval).

Deutsche Bank Securities Inc. provided financial advice to GE and Weil, Gotshal & Manges LLP provided legal advice.


Other GE Capital Divestiture Updates
Earlier today, Mubadala GE Capital Ltd, a joint venture between GE Capital and Mubadala Development Company, announced the sale of substantially all of its assets (\\$3.6 billion of assets; \\$1.5 billion of GE Capital ending net investment) to MidCap Finco Ltd (MidCap). MidCap is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, LLC. The transaction will contribute approximately \\$0.7 billion of capital to the overall target of approximately \\$35 billion of dividends expected to GE under this plan (subject to regulatory approval). It is expected to close in the fourth quarter of 2015.

Additionally, today GE completed the previously announced sale of its Mexican, Australian, and New Zealand fleet businesses, representing aggregate ending net investment (ENI) of approximately \\$1.7 billion, to Element Financial Corporation (TSX:EFN). Element acquired GE’s U.S. fleet services business in August. The completion of the sale of GE’s European fleet businesses to Arval, a fully owned subsidiary of BNP Paribas, is expected to close in the fourth quarter. 

With signing of the Rail and Mubadala transactions, the total for announced sales year-to-date is approximately \\$95 billion.

Sherin concluded, “We are extremely pleased with the progress we have made thus far with the sales of our businesses and GE’s transformation to a more focused digital industrial company.”

About GE

GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the "GE Store," through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com

GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, including @GE_Reports, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

###

Investor Contact:

Matt Cribbins, +1 203-373-2424, matthewg.cribbins@ge.com

Media Contacts:

GE Capital:

Susan Bishop, +1 203-750-5362, susan.bishop@ge.com
 

GE:
Seth Martin, +1 203-572-3567, seth.martin@ge.com

Caution Concerning Forward-Looking Statements

This document contains "forward-looking statements" – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," or "target." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses; our ability to complete incremental asset sales as part of that plan in a timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of our announced plan to reduce the size of our financial services businesses as well as other aspects of that plan; the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage loan repurchase claims and other litigation claims in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve; the effectiveness of our risk management framework; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation; adverse market conditions, timing of and ability to obtain required bank regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from completing the Synchrony Financial split-off as planned; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing, including obtaining regulatory approvals for, announced transactions, such as the proposed transactions and alliances with Alstom, Appliances and our announced plan to reduce the size of our financial services businesses, and our ability to realize anticipated earnings and savings; our success in integrating acquired businesses and operating joint ventures; the impact of potential information technology or data security breaches; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.