Denman Tire Weighs Up Closure Option

Financially troubled US producer of specialty tyres, Denman Tire Corporation, has indicated it may shut down its operations if alternative arrangements cannot be made. In a company statement, Denman restructuring advisor Richard Szekelyi said “the company has reached the difficult decision to begin reducing operations while we continue our efforts to secure financing and/or find a buyer. If these efforts are unsuccessful, there will be no other alternative but to close all of the operations.”

Employees, union representatives and other relevant groups have been informed of the company’s possible intentions, Sekelyi added. It is anticipated that around 260 jobs would be lost if the decision is taken to shut down Denman’s construction, mining and agricultural tyre factory and its warehouse, both located in Ohio. In the event of closure, Denman’s assets will be relinquished to its lender for liquidation.

In March 2009, Denman Tire said it needed government assistance or purchase contracts for its operations to remain viable. Over the following ten months the company’s Board of Directors have, according to the statement, undertaken “exhaustive efforts to refinance the company’s debt or secure a buyer in order to continue operations.”

“We have been working very hard to find a new owner and to raise necessary capital to continue operations.  We also sought governmental support. If these efforts had been successful, Denman could have been a viable company,” Szekelyi continued. “We hope the sale process is successful. If not, we hope to accomplish the cessation of operations and shutdown with the least possible disruption to the lives of our employees and the communities in which the company did business.”