Amtel-Vredestein Delivers $222 Million Loss in 2007

Despite net sales rising 29.4 per cent to $994 million in the full 2007 year to December 1, Amtel-Vredestein has recorded a pretax loss of $222 million for the year. The company states that its strong sales were boosted by its core passenger car tyre business, as well as good trading in other tyre segments. Sales from the company’s Russian operations grew 30 per cent to $439 million, while sales from European operations via the Company’s Vredestein Banden subsidiary rose 18 per cent to $402 million.

AV-TO contributed $254 million to company sales (on a stand alone basis) during 2007 – a 141.9 per cent increase in sales from $105 million in 2006; however it also contributed a $161 million loss in 2007 versus a $9 million loss in 2006 due to poor operational results and $122 million of write-downs relating to goodwill and other intangible assets acquired during 2006.

The company said its going concern status and prospects for 2008 are dependent on the outcome of debt restructuring talks currently underway with the core financing banks of its Russian operations, which is subject to completion of the contemplated merger with Sibur-Russian Tyres.

Amtel-Vredestein said its going concern status and prospects for 2008 are “fully dependent” on the outcome of dept restructuring negotiations currently underway with the core financing banks of its Russian operations, which is subject to completion of the contemplated merger with Sibur-Russian Tyres. The company continues to experience working capital shortages, which may lead to production stoppages, and is furthermore dependent on a second tranche of stabilisation funding from Sibur-Russian Tyres. These shortages of working capital may lead to production stoppages, the company adds.

During 2007 Amtel-Vredestein appointed a new management team, succeeding, among others, Alexei Gurin, the company’s former CEO and his colleagues, who resigned mid-year. Petr Zolotarev was appointed as CEO and chairman of the Executive Board and has installed a new management team, which devised and is currently implementing a turnaround plan with the ultimate objective of deleveraging the company and transforming it for future growth.