Titan International closes RDIF put option transaction

On 22 February, Titan International Inc. closed the previously-announced transaction with an affiliate of the Russian Direct Investment Fund (RDIF), one of the three shareholders of Voltyre-Prom. Under the terms of a definitive agreement entered into on 11 February, Titan paid RDIF US$25 million in cash and agreed, subject to the completion of regulatory approval, to issue RDIF 4,032,259 shares of restricted Titan common stock in a private placement. The agreement stipulates that RDIF must hold these shares for a period of three years from the date of the agreement.

The definitive agreement of 11 February relates to the settlement put option previously exercised by RDIF. Upon closure, RDIF continues to own the same interest in Voltyre-Prom, subject to the terms of the definitive agreement and the Shareholders’ Agreement. Titan retains the right to buy back the Titan shares from RDIF for $25 million during the aforementioned three-year period and, if the stock buyback is consummated within one year, at the time of such buyback RDIF would be required to pay Titan, based on current ownership, a 10.71 per cent interest in Voltyre-Prom; this would result in RDIF’s stake in Voltyre-Prom decreasing from 35.71 per cent to 25 per cent.

Together with its partners, Titan International owns all equity interest in Voltyre-Prom, a Russia-based producer of agricultural and industrial tyres. Voltyre-Prom owns and operates the 185,000 square metre former Volzhsky Tire plant in the city of Volgograd.

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