Finding a permanent solution to the Continental AG/Schaeffler Group combination stalemate may take months, according to a Reuters report. The news agency quotes “sources familiar with the matter” as saying: “There is a chance that the companies and their banks will decide on key points by the end of this year…but it is rather unlikely that this will happen this month."
Financial analysts are predicting that the Pirelli & C SpA will separate shares in its tyre business from the holding company. Writing in an investor’s note, Deutsche Bank analysts predicted “near-term action to reduce holding discount by giving shareholders two stocks: a pure tyre company and a pure holding company” and valued the tyre company at between 0.21 euros and 0.33 euros/share.
Good take up of Pirelli Real Estate SpA’s capital increase, which closed on Friday 3 July and was 99.4 per cent subscribed, has also resulted in a 14 per cent reduction in net debt, according to analysts. The company itself reported it raised 397 million euros throught the offer.
The rights issue recently conducted by Trelleborg has resulted in the following increase of the number of shares and votes in the company during June 2009.
Prior to the rights issue, there were in total 90,357,261 shares in Trelleborg, of which 9,500,000 shares of series A and 80,857,261 shares of series B, corresponding to 175,857,261 votes in total. The number of shares has through the rights issue increased by 180,714,522, of which 19,000,000 shares of series A and 161,714,522 shares of series B. The number of votes increased by 351,714,522. As of June 30, 2009, there are in total 271,071,783 shares in the company, of which 28,500,000 shares of series A and 242,571,783 shares of series B, corresponding to a total number of 527,571,783 votes.
Indian news sources are reporting that Michelin is intending to sell the remaining 7.3 per cent shareholding it has in Apollo tyres. On June 6 2009, Michelin sold a portion of its Apollo stake for approximately 500 million rupees (£6.67 million). The French manufacturer, which held an 11 per cent share in Apollo at the time, sold 3.3 per cent through open market sales. The company has held shares in Apollo Tyres since it acquired a 14.9 per cent stake in early 2004, a deal made at a time when a truck and bus radial joint venture between the two companies seemed likely.
Despite the venture’s failure to get off the ground and the September 2005 announcement that Michelin would acquire Apollo’s share in the joint venture, Michelin maintained its stake in the Indian company. According to reports, the French tyre manufacturer has made “a reasonable profit” from the sale of its Apollo shares. The reports follows Apollo’s takeover of Dutch tyre maker Vredestein Banden for a reported 175 million euros in May.
Kwik-Fit has warned that it may risk breaching its banking covenants after being hit by increased debts and foreign currency effects in 2008. Kwik-Fit, which supplies around 5 million tyres a year in Britain, reported that net debts increased from £96.6 million to £822.1 million last year. Nevertheless Kwik-Fit reported flat operating profits of £75.7 million last year and managed to grow sales 9.8 per cent (up 0.5 per cent if you only count like-for-like sales) to £942 million despite the recession. However, according to a Sunday Times report on the company’s annual accounts, Kwik-Fit has already sold most of its freehold properties in an attempt to reduce its borrowings.
Directors and staff, led by the chief executive, Ian Fraser, own 11 per cent of Kwik-Fit’s shares. According to the Herald newspaper, Ian Fraser saw his pay and benefits surge by 40 per cent last year. Citing accounts filed at Companies House the report points out that the highest-paid director (assumed to be Ian Fraser) got a pay rise of £200,000 to £700,000 in the year to December.
Former Continental AG CEO, Manfred Wennemer, is set to represent Berlin on an advisory board overseeing the trust that administers Opel, according to a Reuters report. Wennemer, who led Continental’s rearguard action against Schaeffler Group’s July 2008 hostile takeover, stepped down last August after seven years with the company when the automotive supplier managed to overcome Conti’s defences. He was subsequently nominated to join the board of steel wire manufacturer Bekaert in March 2009. According to Reuters, the trust holds 65 per cent of Opel shares and is charged with ensuring that 1.5 billion euros ($2.1 billion) in bridge financing offered by Berlin and the four German states with Opel plants is not misappropriated.
Camfin SpA, the largest shareholder in Pirelli parent company Pirelli & C SpA, has negotiated with its banks regarding a 100 million euro capital increase and a rescheduling of its debt. Camfin’s controlling shareholder GPI, along with a consortium of banks, will guarantee all of the capital increase, Reuters reported. Three new directors will also be appointed to Camfin’s board, making a total of 15 directors.
The banks participating in the debt deal include Banco Popolare, UniCredit, Banca Monte dei Paschi di Siena, Intesa Sanpaolo SpA and Banca Popolare di Milano. “The agreement foresees in addition that up to end of 2011 there will be no dividend distribution and that by 2012 the 49 per cent stakes in Pirelli & C Ambiente SpA and Pirelli & C EcoTechnology are sold,” the company said.
Deutsche Bank upgraded Pirelli to buy in London today. According to The Wall Street Journal the broker said that the stock is likely to outperform estimates. While a capital increase at Pirelli Real Estate is partially to thank for the prediction, it is the improvement forecast in the company’s tyre division from the second quarter that explains the new categorisation. Deutsche also believes that steps will be taken to reduce the holding discount. Shares climbed 4.7 per cent in Milan.
Michelin has sold a portion of its shareholding in Apollo tyres for approximately Rs 500 million (£6.67 million). The French manufacturer, who held an 11 per cent share in Apollo, sold 3.3 per cent through open market sales. The company has held shares in Apollo Tyres since it acquired a 14.9 per cent stake in early 2004, a deal made at a time when a truck and bus radial joint venture between the two companies seemed likely. Despite the venture’s failure to get off the ground and the September 2005 announcement that Michelin would acquire Apollo’s share in the joint venture, Michelin maintained its stake in the Indian company.
Marshal has reported the introduction of its Matrac MH11 tyre, adding that the new line-up is already available nationwide. The directional tread MH11 is designed for top selling family saloons and hatchbacks such as the Ford Focus, Volkswagen Golf and Vauxhall Astra, and is available in a range of sizes from 155/65R13 to 236/60R16 and speed ratings H to V
The MH11 features four wide channels and optimally curved outer tread blocks, which Marshal notes are intended to increase resistance to aquaplaning, and a solid circumferential rib for strong straight line performance. Tyre design was carried out by the company’s European Technical Centre, which is based in Birmingham, UK, a facility it shares with parent company Kumho. Given its local design, Marshal comments that customers can be particularly confident of the tyre’s suitability to Britain’s road surfaces and climate.
Once mighty General Motors formally filed for Chapter 11 bankruptcy protection in New York this morning. The pre-packaged bankruptcy is expected to last 30 to 90 days, and GM will receive some $30 billion in US-guaranteed loans. GM is expected to emerge from bankruptcy considerably smaller, after shuttering or selling an estimated 14 plants as part of its bankruptcy. Debt-holders and the United Auto Workers will end up with a stake in the remaining company, while the US government will be GM’s largest owner.
Meanwhile, a federal bankruptcy judge has approved the sale of most of Chrysler assets to Italian automaker Fiat. The sale approval presumably clears the way for Chrysler to exit its own court protection within 60 days. Chrysler’s plan gives a 55 per cent share of the new company to a UAW trust for retirees, a 20 per cent stake to Fiat and smaller shares to the US and Canadian governments. Fiat’s share could grow to 35 per cent under the plan. (Tire Review/Akron)
Following significant developments today for both companies, General Motors and Goodyear have both seen shares jump in value in US trading. Bloomberg says that GM moved up 19 per cent to 89 cents until trading was halted. Goodyear meanwhile rose 8.6 per cent, reaching $12.44. The company has announced following its sale of property in Akron, Ohio to Industrial Realty that it will “record a non-cash, after-tax charge of as much as $45 million in the second quarter in connection with the property sales.”
In order to strengthen its place in the lucrative European replacement market, and with a view to positioning itself for OE contracts, GITI Tire has invested significantly in the expansion of both the company’s main R&D centre in China and the development of a world-class European Technical Centre (ETC). The ETC is based at the renowned MIRA Ltd. facility near Birmingham in the UK where company representatives emphasised that they are already making thorough use of state of the art test facilities a highly experienced test engineers.
For the team, which is led by experienced tyre R&D expert Eddie Young, the first step was to undertake an extensive benchmark programme in order to gain a full understanding of the main competitor’s current performance levels and strengths and weaknesses with the clear objective of designing and engineering GITI products to reach and even surpass these premium competitor’s performance levels. And when you consider that the global R&D is both international in its representation and comprised of technicians who have previously worked at the highest levels of leading tyre brands, you can understand why the bar has been set so high.
Trelleborg has released a prospectus for its latest rights issue. This prospectus, instructs Trelleborg, is not for release, publication or distribution in or into the US, Australia, Canada, Hong Kong or Japan. Therefore the following information is only intended for those located outside these geographic regions. According to Trelleborg’s instructions, anyone located in the above-mentioned countries or any other country imposing legal restrictions beyond those pursuant to Swedish law are not permitted to click the “more” link and read further.
Goodyear Tire & Rubber was one of three companies whose stocks financial services firm JPMorgan added to its small and mid-cap money list on April 24. According to JPMorgan, Goodyear was added to the SMid Money list, as it is likely to benefit from a market rotation into cyclicals from defensives. Following the announcement shares in Goodyear surged 11 per cent to US$10.91.
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