LAFAYETTE, Ind. — A private equity investment fund is investing $35 million in Wabash National.
The agreement, which gives the equity firm close to 50 percent ownership of the struggling trailer maker, is expected to give Wabash the stability it needs to survive an economic recession that has been particularly hard on trailer manufacturers.
Trailer Investments, formed for the purpose of this investment by Lincolnshire Management, is making the investment as part of a securities purchase agreement.
Trailer Investments will purchase $20 million of Series E redeemable preferred stock, $5 million worth of Series F redeemable preferred stock, and $10 million of Series G redeemable preferred stock, among other exercisable shares of common stock.
The agreement represents 44.2 percent of the issued and outstanding common stock of the company.
The agreement also states that Trailer Investments will have the ability to name five out of 12 members to the company’s board of directors and a handful of other rights such as access to information and veto powers in significant matters of the company’s operations.
"This capital infusion will fortify our balance sheet, allowing us to put in place a capital structure that meets the needs of the company during this economic downturn, including to obtain needed accommodations under our existing credit agreement," said Dick Giromini, Wabash National president and CEO.
Meanwhile, the company has also entered into an Amended and Restated Loan and Security Agreement, which amends and restates the company’s current revolving credit facility. The new credit agreement will allow for borrowings of up to $100 million.
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