Tyres are reportedly rolling off the Dunlop production line in Sahagunj, India, for the first time since 2001. The factory, located in the state of Bengal, is initially focusing on manufacturing Earthmover tyres, although the production of other types of tyre should commence before mid 2007. The workforce at Sahagunj numbered 473 the day work resumed, but this number should increase to about 1,200 during the coming months.
Giti Tire, the largest manufacturer of tyres in China, reportedly intends to raise US$200 million from its first bond sale, being held to raise revenue for capital expenditure and possible acquisitions.
Pirelli Tyre SpA, Europe’s third-biggest tyremaker, has arranged a line of credit worth 500 million euros (£337 million) in an attempt to improve the company’s financial structure and boost flexibility. The Italian banks NP Paribas and Banca Monte dei Paschi di Siena SpA have been hired as lead arrangers to organise the five-year multi-currency credit line. This new credit line is larger than any previous funding, a reflection of the tyre unit’s increased independence from the greater Pirelli group.
Italian corporate giant Pirelli & Co SpA is reportedly in favour of seeing its tyre division listed on the stock exchange in March or April as trading conditions improve.
Pirelli’s Initial Public Offering (IPO) plans for the tyre division were dropped last year because market conditions were deemed unfavourable at the time, and instead the company agreed to sell a 38.9 per cent stake in the operation to a company controlled by six Italian and foreign banks. Pirelli & C SpA received 740 million euros (£499 million) from the sale of the 38.9 per cent share.
Under the terms of this agreement, Pirelli has an option to buy back the shares if the banks do not conduct an IPO within four and a half years.
Wheel and automotive parts manufacturer Hayes Lemmerz International Inc. has reported a third quarter loss of US$59.6 million, up from US$13.3 million a year earlier. The company has been quick to point out, however, that this figure includes the sum of US$39 million paid as an asset impairment charge for their suspension facilities in Indiana and Michigan. Third quarter sales for the company were also down 2.4 per cent to US$589.5 million.
After more than half a century as a publicly listed company, Bridgestone Australia Ltd looks set to privatise its operations. Bridgestone Australia directors have announced an AUD$50 million (£20 million) buyback of the minority of shares not already owned by Bridgestone Corporation. If shareholders approve the transaction, Bridgestone Australia will become a wholly owned subsidiary of the parent company.
Europe’s fourth largest tyre producer, Amtel-Vredestein N.V. announced that its subsidiary, OJSC Amtel-Vredestein, along with CJSC Moscow Tyre Plant-M have secured three lines of credit totalling almost £39 million with the Russian Federation’s Sberbank in order to finance costs associated with its acquisition of the Moscow Tyre Plant. These costs include the restructuring and refinancing of the factory’s debts.
Bridgestone shares rose three and a half per cent to 2,550 yen, the greatest gain in two months, after the tyremaker agreed to purchase retreaders Bandag Inc.
Some financial analysts report they have become increasingly optimistic regarding Cooper Tire’s intermediate term performance. The Deutsche Bank report suggested the that poor US demand would soon get better with Cooper benefiting. The analysts also commented that Goodyear’s strategy is likely to have a positive effect on Cooper in the tight supply market. They were also “increasingly convinced” about Cooper’s ability to significantly reduce costs and improve profitability.
The Brera coupé is the latest of three Alfa Romeo launches in 2006 to come fitted with Bridgestone tyres and features the F1-derived, ultra-performance Potenza RE50As as an original equipment option. This product is also available on the new Alfa 159 and 159 Sportwagon.
Stockbrokers and dealers said existing Dunlop Nigeria shareholders and new investors are considering using the company’s forthcoming share offering as a way of taking strategic stock positions.
The United Steelworkers has walked away from contract talks with Goodyear. The USW informed its members that its negotiating team has left Cincinnati – site of the Goodyear/USW master contract talks – and that no new negotiations had been scheduled. “We will go back when the company has something new to show us,” USW spokesman Wayne Ranick said in a Reuters report. Goodyear, for its part, said that its negotiating team would remain in Cincinnati and stood ready to continue bargaining for a new master contract.
So where do the two sides go from here? Deutsche Bank analysts reported that the USW sees Goodyear’s unilateral announcement of a plant closure as “setting an unacceptable precedent, and the bottom line is they aren’t going to budge on this issue.”
Hankook Tire Co. has reported that its third-quarter profit fell 16 per cent on higher raw material costs and a stronger currency. Net income was 44.4 billion won ($47 million) in the quarter that ended 30 September compared with 52.9 billion won ($56 million) a year earlier, the company said in a regulatory filing. Sales rose 7.9 per cent to 526.4 billion won ($558 million). Operating profit fell 27 per cent to 40 billion won ($42 million).
Michelin shares reached their highest price in 17 years following JPMorgan’s decision to rate the manufacturer as “Outperform.” Michelin stock in Paris rose 1.15 euros (£0.77, $1.47), or 1.8 per cent, to 65.50 euros (£44.31, $83.84). The shares are up 38 per cent this year, valuing the company at about 9.39 billion euros (£6.35 billion, $12 billion). Houchoise also commented that the company’s staffing level is currently “30 per cent too high.”
Pirelli & C. SpA, the parent company of the tyre manufacturer, reported a loss in its third quarter after writing down the value of its investment in Telecom Italia SpA, Italy’s largest phone company. The net loss, excluding some items, was 1.6 billion euros ($2 billion), compared with net income of 105.8 million euros ($135 million) a year earlier.
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