OREANDA-NEWS. October 14, 2015. Brunswick Rail announces that in the course of its internal review, as referred to in the Company's press release dated 30 September, the Board learned for the first time that a small number (less than 3%) of the 3,398 railcars that are collateral under the Company's RUB 8bn secured facility agreement dated 22 July 2014 (the Secured Facility Agreement) were used in Crimea by the Company's customers causing the Company to breach certain representations and warranties contained in the Secured Facility Agreement.

The Company is in the process of determining how this has occurred, and who amongst the management team were aware or involved.

While the Company does not believe it is in breach of any applicable sanctions legislation, these facts may have triggered a prepayment event under the Facility Agreement at the option of the Lenders.  The Company has therefore sought a waiver of the resulting rights of the Lenders. Without such a waiver, the issuance of the auditor's review report on the Company's H1 unaudited financial statements may be delayed. If it is delayed, an additional waiver would be needed relating to late delivery to the Lenders.

The Company does not believe that any of the other matters uncovered to date by the review process rise to a level of financial statement materiality.  In addition, the Company has directed its Legal Department and Commercial Department to immediately take all measures available to them to ensure that no railcars that are collateral under the Facility Agreement be used or present in Crimea.

About Brunswick Rail:

Brunswick Rail is a private railcar operating lessor providing freight railcars to large corporate clients in Russia. Established in 2004, Brunswick Rail currently owns a fleet of ca. 25.7 thousand railcars (as of 30 June 2015), which represents approximately 2% of the total Russian railcar fleet.