American Railcar to invest in car leasing

American Railcar Industries, Inc. announced Tuesday that it plans to invest in freight car leasing to “expand and diversify its business in response to customer demands and market conditions.”

“ARI is very excited to offer railcar leasing and provide another option forcustomers to utilize our quality railcars,” said President and CEO James Cowan in a statement. “We remain committed to meeting the needs of our customers. The economy and railcar market have been challenging over the last couple of years and ARI is responding to those challenges with an expanded market strategy.”

The company said it is in negotiations with American Railcar Leasing LLC, an affiliate, “to enter into an agreement pursuant to which ARL would identify potential leasing customers for ARI in exchange for fees payable by ARI to ARL.” The statement went on to say that ARL is controlled by Carl C. Icahn, the company’s principal beneficial stockholder and chairman of the company’s board of directors, and “any agreements with ARL are the product of arm’s length negotiations and are approved by the independent directors of the company’s board of directors.”

ARI said it anticipates that the leasing business will provide “a more consistent stream of cash flows and revenue, during the down cycles of the railcar market. ARI currently plans to fund leasing operations through existing cash. As of September 30, 2010, ARI reported cash of approximately $310 million. Investing existing cash in railcars built to order for leasing customers is expected to enhance returns.”