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January 31, 2014
07:04 EDTCTBCooper Tire reaches agreement with Chengshan, CCT on path forward for JV
Cooper Tire & Rubber Company announced it has signed an agreement with Chengshan Group Company Ltd. and the CCT labor union establishing a path forward for the Cooper Chengshan Tire Company joint venture. The agreement establishes a process for determining the future ownership of CCT, which begins with engaging an independent valuation firm to determine the fair market value of CCT. Once a valuation is established, Chengshan will have the first option to either purchase Cooper’s 65% interest or to sell its 35% interest to Cooper, making CCT a wholly-owned subsidiary of Cooper. If Chengshan determines not to exercise either of these options, Cooper has the right under the agreement to purchase Chengshan’s 35% interest. The options are conditioned on Cooper reporting its financial results within a specified timeframe. In the event that neither party elects to purchase the others’ interest, the agreement allows for continuation of the joint venture as currently structured. The agreement further stipulates that should Chengshan purchase Cooper’s stake in the joint venture, Cooper will continue to have offtake rights with CCT agreeing to produce Cooper brand products, including Truck and Bus Radial tires, for a minimum of three years. The agreement also confirms that, with the support of the labor union and Chengshan, normal operations will be sustained at CCT including the production of Cooper brand products and access to financial and operational data that will allow Cooper to resume regular financial reporting.
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