Titan International sells Wheels India share
Titan International, Inc. has reduced its shareholding in steel wheel manufacturer Wheels India Limited. It sold, via a wholly-owned subsidiary, a 10.4 per cent stake in Wheels India on 3 October, thereby dropping its share in the company from 34.2 to 23.8 per cent. Titan International intends to use the net proceeds of approximately US$19 million received from the transaction to pay down outstanding indebtedness.
“During our second-quarter earnings release, we noted our multi-dimensional plan of attack to effectively deal with the current business cycle that included protection of our balance sheet as a facet of the plan,” commented Paul Reitz, president and chief executive officer of Titan International. “This recent action to sell Wheels of India shares is among the several steps we are taking to optimise our balance sheet and cost position in light of the current market conditions. I expect to see further cash flow improvements over the course of the next several quarters, coming from improvements in our working capital management that we are already seeing, along with other asset sales, which will enhance our flexibility to manage the business in the current business climate.
“We firmly believe that Wheels India is a strong company on a good path for the future,” Reitz continued. “We continue to support its current leadership and will maintain our two board seats as part of our remaining 23.8 per cent stake.”
Titan International, Inc.’s Board chairman, Maurice Taylor, stated, “The Board of Directors congratulates CEO and president, Paul Reitz, and his team for the execution of this share sale. They are taking the proper actions to reduce non-core assets and to concentrate our investments into our core wheels, tyres and undercarriage businesses. The markets have been very difficult, to say the least, but there are reasons to be optimistic that the next year could see an uptick in both farm and construction.
“It is a fact that Titan’s primary factories are in countries that have major agriculture economies that produce and export food,” Taylor continued. “Populations continue to grow around the world and in developing countries, people are continually eating a higher protein-based diet, which requires more agricultural output to support that growth. The Board agrees with the Titan’s team plan to reduce our non-core assets that have been part of Titan’s expansion over the last 30 years and to focus more heavily on our ag wheels and tyres businesses that are number one in the world.”
Wheels India, a TVS Group company, is one of the world’s largest steel wheel manufacturers. In addition to producing wheels for agricultural and construction applications, the it produces steel and aluminium wheels for light and heavy vehicles.