Pirelli & C. S.p.A. has given details of what will be carried out in accordance with the resolutions regarding the reverse stock split of ordinary and savings shares adopted at its Extraordinary Shareholders’ Meeting on 15 July 2010. The company intends to begin the reverse stock split on July 26 and carry out the transaction according to the details outlined in the official Pirelli statement printed below:
At an Extraordinary Shareholders' meeting held on July 15, Pirelli C. & SpA shareholders approved the separation of Pirelli Real Estate from the Pirelli Group by way of proportional assignment to ordinary and savings shareholders. These shareholders will be assigned a total of 487,231,561 ordinary Pirelli RE shares that are currently held by Pirelli & C. To this end, the shareholders approved a reduction of the share capital in an amount equal to 178,813,982.89 euros, a sum that corresponds to the value of the Pirelli RE stake being assigned and was determined on the basis of the official Pirelli RE share price as of 14 July 2010.
Recent growth at Chris Mullins Tyres in Gloucester has seen the company expanding its workforce with the appointment of Paul Mustoe as customer service manager. The move reunites 42-year old Mustoe with former colleagues Chris Mullins and business partner John Price, with all three having previously worked together for Ebley Tyres in the late 1980s.
“John and I have known Paul for more than 20 years so it’s great to be working with him again,” says Chris Mullins. “Customer service is as important in the tyre business as is it is in any other retail sector and that’s where Paul’s skills and knowledge are invaluable to us. He already knows many of our customers and is respected by them for his experience and practical advice.”
Continental AG should strike while the iron is hot and sell more debt while the market is in a receptive mood. That’s the view of The Wall Street Journal’s Michael Wilson, who explained in an article published today (14 July 2010) that the company needs the money to service its 8.2 billion euro syndicated credit facility, which is due to be repaid in August 2012:
“Since the start of this year, the company has been promising to issue bonds, the proceeds from which will be used to repay the facility. However, volatility in capital markets during the start of this year meant it was only last week that the company felt confident enough to actually launch a deal.”
Shares in automotive supplier Continental AG “jumped” in response to the company upgrading its predictions for second quarter results on 2 July. While the full audited results for the second quarter and first half of 2010 are not due to be released until 29 July, according to first preliminary figures, unaudited sales for the first half of this year increased by about 38 per cent to approximately 12.5 billion euros compared with 9.063.2 million in 2009. On this basis, adjusted EBIT is expected to amount to at least 1.2 billion euros (2009: 248.8 million).
One significant aspect of the Reifen 2010 show for Monarch Vulcanising was that the company received numerous business enquiries from markets where it has previously not been active. Company president Toni Elderfield told Tyres & Accessories that “we’ve had a lot of interest this week from East European visitors, from people based in markets such as Poland. This has been interesting for us as we currently sell very little into Europe.” While the Guernsey based company sells its products around the world, its neighbours have accounted for only a small portion of total sales during the company’s forty years in the tyre repair business.
Following news of the lockout at Apollo’s Kerala, India-based facility, shares in the company fell by around six per cent, but management reassurances that the company would make up the production deficit elsewhere and 85 per cent of the Perambra workforce wanted to return to work have pushed share prices to levels experienced prior to the lockout, according to financial news sources.
Goodyear India Ltd. shares remain listed on the Bombay stock exchange following a failed delisting offer from parent company Goodyear Tire & Rubber. The US tyre maker made an offer to acquire close to six million shares in the Indian company, a figure representing 26 per cent of its equity capital. However it only received bids for around 1.136 million shares at a discovered price of Rs 340 (₤4.96) each. According to the Bombay Stock Exchange’s delisting regulations, the delisting offer would have only been considered successful if at least 3.69 million shares had been tended at or below the discovered price.
Shares in Apollo Tyres Ltd have fallen around five per cent since the announcement of a lockout at its Perambra factory. This plant accounts for nearly a quarter of Apollo’s global tyre production and has a capacity of 850 tonnes per day, yet even before the lockout it was not reaching anything near this amount – and it is thus not surprising that investors are showing signs of nervousness.
Analysts at Deutsche Bank has upgraded Continental AG’s stock rating to “buy” after raising its earnings per share (EPS) estimates by more than 20 per cent for 2010 and 2011. According to the analysts the revision is entirely attributable to better volumes: “With car production in the second quarter close to the first quarter, our new second quarter adjusted EBIT estimate is 540 million (versus 400 million euros previously) and our full year adjusted EBIT is upgraded by 13 per cent to 1.87 billion euros (consensus: 1.75 billion).” Writing in an investor’s note published on 11 June, the analysts explained that this corresponds to an EBIT margin of 8.1 per cent and to an adjusted EPS of 3.9 euros, 8 per cent above consensus.
Ceat Ltd announced on Friday 4 June that its Sri Lankan investment arm – Associated Ceat Holdings Company Pvt Ltd (ACHL) – has become a wholly-owned subsidiary after it bought the remaining 4.5 million shares in the company. Ceat previously held a 54.84 per cent stake in ACHL. ACHL holds a 50 per cent stake in CEAT Kelani Associated Holdings Pvt Ltd, a joint venture with Sri Lanka's Kelani Tyres.
Shares in tyre manufacturers outperformed most of the various European OEMs’ stock between 26 April and the end of May, in the wake of the Greek debt crisis. That’s the verdict of Deutsche Bank analysts, who wrote that tyre manufacturer’s resilience has on the whole been supported by their aftermarket sales.
In an investor’s note published on 28 May, the analysts pointed out that share prices in general dropped by an average of 12 per cent, in line with the market, with “a significant discrepancy” in the automotive sector: “On one side, the share price of tyre companies (namely Michelin, Continental and Pirelli) and of German OEMs (BMW, Daimler, VW) has been very resilient. On the other side, mass market OEMs (Fiat, PSA and Renault) have underperformed massively,” the report read.
Leading commercial vehicle wheel business Motor Wheel Service Distribution recently invested £500,000 in UK and European infrastructure in preparation for the “official launch” of its xlite range of forged aluminium commercial vehicle wheels. xlite wheels were “soft launched” some time ago, with Tyres & Accessories previewing the initial release back in April 2005. Since then the product range, branding, infrastructure and strategy have all evolved from what was initially a low level market trial into a Europe wide sales and distribution operation prepared to operate on the scale of the largest players in the business.
With over 80 years experience in the wheel business, Motor Wheel Service started out specialising in passenger car products, especially wire wheels. This business continues to this day, running out of the Motor Wheel Services International operation in Berkshire and company representatives still claim the ability to resurrect virtually any wire wheel back to its former glory. But now this wing operates as a distributor for the main part of the company’s business – Motor Wheel Service Distribution based in Manchester, which has been supplying commercial vehicle wheels for over 20 years.
Bridgestone Corp. posted better than anticipated results for the first quarter, prompting the company to make an upward revision to its FY2010 financial projections. For the quarter, Bridgestone posted sales of 659 billion yen, up 16.1% year-over-year, while net income rose from a 34.9 million yen loss last year to a net gain of 17.6 million yen.
The board of Pirelli & C. has confirmed what the market has been predicting for some time – the company has “resolved upon a plan for separation of Pirelli Real Estate” from the rest of the tyre dominated business. According to the company, such a separation will occur through the assignment of nearly all Pirelli RE shares held by Pirelli & C. to ordinary and savings shareholders of Pirelli & C., and, therefore, via voluntary reduction of the corporate capital of Pirelli & C. for “an amount equal to the value of the Pirelli RE stake being assigned.” Now shareholders have to approve the transaction by July in order for the actual separation, planned for the end of 2010, to take place.
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