Cooper Tire & Rubber Company (NYSE: CTB) today reported the results of the valuation of Cooper Chengshan (Shandong) Tire Company Ltd (CCT), which was completed by an independent firm responsible for determining a fair market value for CCT on a stand-alone basis, excluding the value of trademarks and technologies licensed by Cooper to CCT. The valuation, which is the option price, was determined to be RMB 2.722 billion or approximately US $440 million at the current exchange rate.
Under the option agreement announced August 15, 2014 between Cooper and Chengshan Group Company Ltd., upon delivery of the valuation, Chengshan has the first option to elect, within 45 days, to purchase Cooper’s 65 percent interest in CCT for 65 percent of the option price, to sell its 35 percent interest in CCT to Cooper for 35 percent of the option price, or not to exercise either of these options. If Chengshan determines not to exercise either the put or call option, Cooper has the right to purchase Chengshan’s 35 percent interest in CCT for 35 percent of the option price. In the event that neither party elects to purchase the other’s interest in CCT, the option agreement provides that the joint venture will continue as currently structured. Further, should Chengshan purchase Cooper’s stake in the joint venture, Cooper will continue to have offtake rights with CCT agreeing to produce Cooper-brand products, including truck and bus radial tires, for a minimum of three years.
“We look forward to final resolution of the ownership of CCT as Cooper continues to pursue our growth plans for China,” said Chairman, Chief Executive Officer and President Roy Armes. “Regardless of who owns CCT, Cooper is committed to continuing to build on the strong foundation we have in place in China by expanding our brand awareness and distribution network, and by growing profitable sales in the region through the original equipment channel and replacement tire market,” Armes added.
Forward Looking Statements
This release contains what Cooper
believes are “forward-looking statements,” as that term is defined under
the Private Securities Litigation Reform Act of 1995, regarding
expectations or matters that the Company anticipates may happen with
respect to the ultimate outcome of the transactions contemplated by the
January 29, 2014 agreement regarding CCT ownership, which involve
uncertainty and risk. Such “forward-looking statements” are generally,
though not always, preceded by words such as “expects,” “will,”
“intends” and similar terms that connote a view to the future and are
not merely recitations of historical fact. Such statements are made
solely on the basis of Cooper’s current views and perceptions of future
events, and there can be no assurance that such statements will prove to
be true. It is possible that actual events may differ materially from
those expectations due to a variety of factors, including but not
limited to: Chengshan’s decision to exercise its options under the
option agreement; changes in the Company’s relationship with Chengshan,
including changes resulting from the January agreement and the option
agreement; changes in economic and business conditions in the world;
changes to tariffs or the imposition of new tariffs or trade
restrictions; volatility in the capital and financial markets or changes
to the credit markets and/or access to those markets; changes in
interest or foreign exchange rates; the risks associated with doing
business outside of the United States; the impact of labor problems,
including labor disruptions at Cooper, its joint ventures, including
CCT, or at one or more of its large customers or suppliers; and the
ability to sustain operations at CCT, including obtaining financial and
other operational data of CCT. It is not possible to foresee or identify
all such factors. Any forward-looking statements in this release are
based on certain assumptions and analyses made by Cooper in light of its
experience and perception of historical trends, current conditions,
expected future developments and other factors it believes are
appropriate in the circumstances. Investors are cautioned that any such
statements are not a guarantee of future performance and actual results
or developments may differ materially from those projected. Cooper makes
no commitment to update any forward-looking statement included herein or
to disclose any facts, events or circumstances that may affect the
accuracy of any forward-looking statement. Further information covering
issues that could materially affect financial performance is contained
in Cooper’s periodic filings with the U.S. Securities and Exchange
Commission.
About Cooper Tire & Rubber Company
Cooper Tire & Rubber
Company (NYSE: CTB) is the parent company of a global family of
companies that specialize in the design, manufacture, marketing, and
sales of passenger car and light truck tires. Cooper has joint ventures,
affiliates and subsidiaries that also specialize in medium truck,
motorcycle and racing tires. Cooper's headquarters is in Findlay, Ohio,
with manufacturing, sales, distribution, technical and design facilities
within its family of companies located in 11 countries around the world.
For more information on Cooper, visit www.coopertire.com,
www.facebook.com/coopertire
or www.twitter.com/coopertire.
Contacts:
Investor Contact:
Christine
Hanneman, 419-424-4214
cjhanneman@coopertire.com
or
Media
Contact:
Anne Roman, 419-429-7189
alroman@coopertire.com