Amtel Sells Moscow Tyre Plant to Midland for $77million
Amtel-Vredestein has sold its CJSC Moscow Tyre Plant-M (MTP) wholly-owned subsidiary to one of the companies of Midland Resources Holding Limited for $77 million. OJSC Amtel-Vredestein acquired MTP in 2006 from OJSC Moscow Tyre Plant, a holding company controlled by the City of Moscow.
According to Amtel-Vredestein, the total transaction’s value is $77 million, a figure that comprises 100 per cent of the shares of MTP and all inter-company debts to Amtel-Vredestein companies, plus external MTP debts that have been assumed by the buyer. As part of the transaction Amtel-Vredestein reports that the company is considering the possible sale of existing equipment within MTP. Proposals include the possible sale and relocation of the equipment to other Amtel-Vredestein plants for internal use.
The news supports an earlier Tyres & Accessories report (published 10 days before the sale was announced), which suggested Amtel-Vredestein had actually shut down production in Moscow with the intention of selling off plant and machinery to a third party. Informed sources told T&A that Amtel-Vredestein’s decision to cease production in Moscow paved the way for the sale of the factory’s tyre production equipment. In December 2007 Amtel-Vredestein announced that it was discussions with “a number of companies” regarding the possible sale of its Moscow tyre manufacturing unit. No further details were announced. At the time the company explained that in this event production would be transferred to its Voronezh, Russia facility.
This news came only a day after the AK&M agency reported that former CEO Alexei Gurin has been appointed as the director general of the Moscow Tyre Plant. The AK&M report stated that the plant continues to manufacture pneumatic tyres for cars and trucks under the Taganka trade name. No-one at Amtel-Vredestein’s press department in Russia was available to comment.
According to the AK&M, Moscow Tyre Plant’s 2005 net losses rose to reach 137.96 million rubles (3.72 million euros) from 90.3 m rubles (2.44 m euros) the previous year; revenues declined 2.8 per cent to 1.2 billion Rub. (32.4 million euros) during the same period.