Titan International’s December 13 offering of US$75 million aggregate principal amount Convertible Senior Subordinated Notes, due 2017, has been increased to $150 million aggregate principal amount. The offer’s terms and conditions remain as previously announced.
Titan says it intends to use the proceeds from the offering for general corporate purposes, including financing potential future acquisitions and repayment of existing debt obligations.
MITL Acquisition Corp., comprised of former GPX International Tire officials and private investors, identified itself as the winning bidder for the solid tyre business sold out of bankruptcy by GPX. The new company will operate as Maine Industrial Tire, and will be led by Bryan Ganz, CEO; Troy Kline, president and COO; and Phil Fitzgerald, director of China operations.
Pirelli Tyres has awarded its global advertising efforts to Young & Rubicam, returning to the international agency after a 10-year absence. Y&R said its WPP Group in Milan will handle the day-to-day business. Y&R won the bid over five other agencies, including incumbent Wieden+Kennedy in Amsterdam.
Titan to Offer Convertible Senior Subordinated Notes
Titan International has reported its intention to offer US$75 million aggregate principal amount of its Convertible Senior Subordinated Notes, due 2017, in a private offering. The company says it intends to use the proceeds from the offering for “general corporate purposes”, including financing potential future acquisitions and repayment of existing debt obligations.
India’s Ruia Group, parent company of Dunlop India and Falcon Tyres, has acquired a 60 per cent controlling stake in Germany’s Henniges Automotive Grefrath GmbH, a supplier of automotive sealing systems to numerous vehicle manufacturers, including Daimler, BMW, Audi and Volkswagen. The cost of the acquisition, made through a Special Purpose Vehicle on behalf of Ruia, has not been disclosed. A further 15 per cent share in the acquired company now rests in the hands of Henniges director Juregen Hein, while administrator Wolf Von Der Fecht owning the remaining 25 per cent stake. Ruia Group chairman Pawan K Ruia told Dow Jones Newswires that the group has a call option to buy back the shares held by Fecht and Hein.
Yokohama Rubber has announced its participation in the Dubai International Motor Show 2009, which will run from December 15, Tuesday, through December 20, Sunday. A key product on display at the show will be Yokohama’s new “Advan dB”, which will be launched in Asian markets in July. The company says it will also exhibit “as reference products” a number of its latest offerings that have not been released in the Middle East market. A new corporate visual theme – "Samurai" – will also be unveiled for overseas markets during the show.
State Funds to Aid in Testing of Canadian Scrap Tyre Technology
Canadian firm Ellsin Environmental Ltd is receiving government support in its implementation of technology that will enable scrap tyres to be converted into usable by-products by means of a microwave process. The patented reverse polymerisation technology was developed over a period of more than 15 years by another Canadian company, Environmental Waste International (EWI), and Ellsin has contracted EWI to build a demonstration system based on the EWI process. To assist, the Northern Ontario Heritage Fund Corporation (NOHFC) is investing CA$2 million assist in the construction of a test plant.
Trelleborg Ending European Galaxy Distribution Following GPX Acquisition
As a result of Alliance Tire Group’s purchase of worldwide rights to the Galaxy brand from GPX International Inc., Trelleborg Wheel Systems will consequently stop distributing Galaxy-brand off-the-road tyres in Europe. Trelleborg states it continue to support its customers with the Galaxy brand until the new owner takes over.
Alliance Tire Group has successfully fought off Titan International’s bid for key GPX International Tire Corporation assets. On December 2, Titan submitted a US$44 million bit for GPX International’s US and South African business assets to the US Bankruptcy Court for the District of Massachusetts, an offer $5.7 million higher than that previously announced by Alliance. However, on December 8 Alliance announced the court approval of its agreement to acquire key GPX International assets, customer relationships, warehouse footprint and engineering capabilities. The agreement will also give Alliance worldwide rights to the Galaxy and Primex brands, the company’s medium radial truck tyre distribution business and South African subsidiary, GPX Tyre South Africa (Pty.). Exact details of Alliance’s final bid are unknown, however it is said to be in excess of $50 million.
Alliance Tire Group has selected the Netherlands town of Halsteren as the location for Alliance Europe BV’s new office, commenting that the site positions it well to ensure improved responsiveness and to serve the market in a quick and reliable manner. The company adds that the move to a new office “facilitates the group’s ability to provide excellent customer support and sales services to its European business partners.”
Financial analysts expect tyre makers to increase prices between 5 and 8 per cent in January 2010, in part due to increased demand and supply shortages in some markets. The Morgan Stanley analysts once again singled out Hankook for particular praise and a “Buy” rating, saying: “After raising tyre prices by an average 7 per cent in the US in mid-October, Hankook is planning to raise average selling by…6 – 7 per cent in other major markets from early next year.”
Yokohama, Continental and Nexen have all announced plans to raise prices by 5-8 per cent from January next year, the analysts explained, adding: “Hankook is also scheduled to begin price negotiations with…OEMs this month and is targeting a 3 per cent average selling price increase. These price hikes should help it offset natural rubber price hike to a large extent.”
In From the Cold: Former Michelin Nordic MD Returns to UK
When Malcolm Scovell was appointed commercial director at Michelin Tyre Plc earlier this year, his appointment marked a significant change in the company’s management as it followed the almost simultaneous appointment of Bill Schafer as commercial director of Michelin’s UK truck and bus operations in July. Now Scovell’s predecessor (Hervé de Froment) has transferred to take on a new role with Michelin in sunny Spain, Scovell – himself the former managing director of Michelin Nordic – has taken the opportunity to move to warmer (if not drier) climes. In his first full interview since taking over at Campbell Road, Tyres & Accessories asked what he brings to the role and what the market can expect in the next 12 months.
According to Malcolm Scovell, premium brands have managed to maintain their overall market share despite the pressures of the down market. However, it is clear that some have faired better than others. As far as Michelin is concerned this year is said to have been pleasingly stable: “We are confident we have been able to maintain our position…[But] if we hadn’t have taken such a broad approach to the market – fleets, distribution, OE etc – we could have lost ground.”
Marangoni, Pirelli Sign Truck Tyre Retreading Agreement
Marangoni and Pirelli Tyre have signed a collaboration agreement covering the retreading of heavy vehicle tyres. This new agreement reinforces the previous deal signed in 2003 for Europe, and recently extended to incorporate South America, a region where Pirelli holds undisputed truck tyre segment leadership and Marangoni has developed an important, qualified presence in the retread market.
On December 3, a year and a week after its foundation stone was laid, Continental inaugurated a new office building for its Automotive Group R&D centre employees in the Romanian city of Iasi. The 9,000 square metre premises was erected at a cost of around 20 million euros, and will host the research and engineering brains behind all three of the Automotive Group’s divisions: Chassis & Safety, Powertrain, and Interior. Development activities at the new site will range from electronic brake systems and chassis components to hybrid electric drives and body and security as well as infotainment. In total, approximately 450 people are currently employed at the site.
Has Pirelli Lost Fifth Place in European TBR Market to Hankook?
Market share data released by Hankook shows that Michelin remains the undisputed leader in both the car and truck tyre segments. However, the previously exclusive stable of top five tyre manufacturers has gained a new member in 2009. Hankook’s decision to publish its projections of how the land lies, following one of the most tumultuous periods in the market’s history, may only have happened because it was a good year for the South Korean tyre manufacturer, however the fact remains the unusual combination of events experienced in the last 12 months means there are signs that the status quo has been disrupted. Looking forward the question is: will the company be able to sustain this position in the years to come?
Here’s Hankook’s calculation of how the European car tyre market will look at the end of 2009. Michelin remains market leader with a 20 per cent market share, followed by Goodyear Dunlop (18 per cent). Bridgestone are next on the list with a 12 per cent share of the market, followed by Pirelli with 8 per cent. And here’s where things get interesting. Hankook are in sixth place with a 7 per cent market share, snapping at the heels of fifth-placed Pirelli who are only one percentage point ahead with 8 per cent.