In its most recent quarterly report, US-based off-highway tyre manufacturer Titan International, Inc. reports owning 64.3% of Russian tyre maker Voltyre-Prom, with the Russian Direct Investment Fund the remaining shareholder. Yet this connection with Russia hasn’t stopped Titan raising its voice against indirect imports of Russian petroleum products into the USA. Together with the United Steelworkers union, Titan has even sent a letter to Joe Biden.
Although Russian tyre maker Voltyre-Prom recently spoke of potential opportunities arising from the war in Ukraine and related international implications, majority shareholder Titan International confirms it will not be investing in this business any time soon. Details of Titan’s relationship with the Russian operation were set out in the US-based firm’s 10-Q financial report for Q1 2022 and further commented on during a teleconference held on 3 May.
While other tyre makers are distancing themselves from Russia and moving production capacities elsewhere at present, Titan International Inc.’s subsidiary in Volzhsky, Volgograd Oblast has announced plans to increase its production volumes. Voltyre-Prom, which is majority owned and managed by the Illinois, USA-based off-highway tyre specialist, states that the current situation “opens up new opportunities” for it to increase production volumes and sales.
OTR tyre specialist Titan International, which owns the Voltyre-Prom tyre manufacturing operation in Russia, is bracing itself for “the potential impact of bans, sanction programs, and boycotts…” due to Russia’s recent invasion of Ukraine. However, deep in the detail of Titan’s strong fourth-quarter 2021 reports which were published today (3 March 2022), executives affirm that “the impact of the military conflict between Russia and Ukraine has not had a significant impact on global operations”.
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.
Titan International, Inc. has received an additional settlement put option notice From OEP 11 COÖPERATIEF U.A. (OEP), an affiliate of One Equity Partners, one of the three shareholders of Voltyre-Prom, of its exercise, effective 8 January 2019, of the settlement put option with respect to its holdings in Voltyre-Prom, pursuant to the Voltyre-Prom Shareholders’ Agreement.
The Russian Direct Investment Fund (RDIF) has informed Titan International of its wish to relinquish its shareholding in agricultural and industrial tyre manufacturer Voltyre-Prom. The Kremlin-backed sovereign wealth fund, which acquired the tyre maker together with Titan and private equity firm One Equity Partner in 2013, shared its intention via its exercise on 14 November of the settlement put option included within the Voltyre-Prom Shareholders’ Agreement.