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Cooper Tire Reaches Agreement with Chengshan Group and CCT Labor Union on Path Forward for CCT Joint Venture

  Cooper Tire Reaches Agreement with Chengshan Group and CCT Labor Union on
  Path Forward for CCT Joint Venture

    Agreement establishes process for determining future ownership of CCT
   beginning with independent valuation; positions Cooper to resume regular
                             financial reporting

Business Wire

FINDLAY, Ohio -- January 31, 2014

Cooper Tire & Rubber Company (NYSE:CTB) today announced it has signed an
agreement with Chengshan Group Company Ltd. and the CCT labor union
establishing a path forward for the Cooper Chengshan (Shandong) Tire Company
Ltd. (CCT) joint venture.

The agreement establishes a process for determining the future ownership of
CCT, which begins with engaging an independent valuation firm to determine the
fair market value of CCT. Once a valuation is established, Chengshan will have
the first option to either purchase Cooper’s 65 percent interest or to sell
its 35 percent interest to Cooper, making CCT a wholly-owned subsidiary of
Cooper. If Chengshan determines not to exercise either of these options,
Cooper has the right under the agreement to purchase Chengshan’s 35 percent
interest. The options are conditioned on Cooper reporting its financial
results within a specified timeframe. In the event that neither party elects
to purchase the others’ interest, the agreement allows for continuation of the
joint venture as currently structured.

The agreement further stipulates that should Chengshan purchase Cooper’s stake
in the joint venture, Cooper will continue to have offtake rights with CCT
agreeing to produce Cooper brand products, including Truck and Bus Radial
(TBR) tires, for a minimum of three years.

The agreement also confirms that, with the support of the labor union and
Chengshan, normal operations will be sustained at CCT including the production
of Cooper brand products and access to financial and operational data that
will allow Cooper to resume regular financial reporting.

“With this agreement, Cooper gains certainty regarding sustained normal
operations at CCT as well as a defined process for determining the long-term
ownership of the joint venture based on a fair market value,” said Cooper
Chairman, Chief Executive Officer and President Roy Armes.

“If Cooper sells its interest in CCT to Chengshan, the commercial offtake
rights secure a future supply of product for our customers. Cooper will also
have added flexibility to enter into acquisitions, new offtake relationships,
or possible greenfield development of additional production capacity anywhere
around the world to support the expansion of our TBR business. If Cooper buys
Chengshan’s minority interest in CCT, we will have the certainty of a
wholly-owned asset with an experienced team in place that will continue our
China growth strategy,” Armes added.

“In either scenario, China is a core growth market for Cooper and we will
continue to rely on the existing sales and marketing organization and
technology team we have in China, as well as our CKT manufacturing operation
located outside of Shanghai in Kunshan. This wholly-owned facility has
continued to grow and evolve into a world-class operation with ample capacity
for further expansion,” Armes said.

“Overall, this agreement puts Cooper in a solid position to aggressively
pursue our strategic plan, which is focused on driving stockholder value as
its overarching goal. Cooper now has a clear path to resume regular financial
reporting, and as the long-term ownership of CCT is determined, we will
continue to address our capital deployment options to deliver maximum value
for our stockholders,” Armes concluded.

Cooper Management Webcast for Investors Today at 9 a.m. EST
Cooper management will hold a webcast regarding the agreement at 9 a.m. EST
today, January 31. The webcast may be accessed at
http://www.media-server.com/m/p/yp9skj78 or at the company’s investor
relations website at http://coopertire.com/investors.aspx. Beginning
approximately two hours after the webcast, an archive of the webcast will be
available at both urls for 30 days.

About Cooper Tire & Rubber Company
Cooper Tire & Rubber Company is the parent company of a global family of
companies that specialize in the design, manufacture, marketing, and sales of
passenger car and light truck tires. Cooper has joint ventures, affiliates and
subsidiaries that also specialize in medium truck, motorcycle and racing
tires. Cooper's headquarters is in Findlay, Ohio, with manufacturing, sales,
distribution, technical and design facilities within its family of companies
located in 11 countries around the world. For more information on Cooper Tire,
visit www.coopertire.com, www.facebook.com/coopertire or
www.twitter.com/coopertire.

FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements are not based on
historical facts but instead reflect Cooper’s expectations, estimates or
projections concerning future results or events. These statements generally
can be identified by the use of forward-looking words or phrases such as
“believe,” “expect,” “anticipate,” “project,” “may,” “could,” “intend,”
“intent,” “belief,” “estimate,” “plan,” “likely,” “will,” “should” or similar
words or phrases. These statements are not guarantees of performance and are
inherently subject to known and unknown risks, uncertainties and assumptions
that are difficult to predict and could cause our actual results, performance
or achievements to differ materially from those expressed or indicated by
those statements. We cannot assure you that any of our expectations, estimates
or projections will be achieved.

The forward-looking statements included in this document are only made as of
the date of this document and we disclaim any obligation to publicly update
any forward-looking statement to reflect subsequent events or circumstances.

Numerous factors could cause our actual results and events to differ
materially from those expressed or implied by forward-looking statements,
including, without limitation: volatility in raw material and energy prices,
including those of rubber, steel, petroleum based products and natural gas and
the unavailability of such raw materials or energy sources; the failure of
Cooper’s suppliers to timely deliver products in accordance with contract
specifications; changes in economic and business conditions in the world;
failure to implement information technologies or related systems, including
failure by Cooper to successfully implement an ERP system; increased
competitive activity including actions by larger competitors or lower-cost
producers; the failure to achieve expected sales levels; changes in Cooper’s
customer relationships, including loss of particular business for competitive
or other reasons; litigation brought against Cooper, including products
liability claims, which could result in material damages against Cooper;
changes to tariffs or the imposition of new tariffs or trade restrictions;
changes in pension expense and/or funding resulting from investment
performance of Cooper’s pension plan assets and changes in discount rate,
salary increase rate, and expected return on plan assets assumptions, or
changes to related accounting regulations; government regulatory and
legislative initiatives including environmental and healthcare matters;
volatility in the capital and financial markets or changes to the credit
markets and/or access to those markets; changes in interest or foreign
exchange rates; an adverse change in Cooper’s credit ratings, which could
increase borrowing costs and/or hamper access to the credit markets; the risks
associated with doing business outside of the United States; the failure to
develop technologies, processes or products needed to support consumer demand;
technology advancements; the inability to recover the costs to develop and
test new products or processes; the impact of labor problems, including labor
disruptions at Cooper or at one or more of its large customers or suppliers;
failure to attract or retain key personnel; consolidation among competitors or
customers; inaccurate assumptions used in developing Cooper’s strategic plan
or operating plans or the inability or failure to successfully implement such
plans; failure to successfully integrate acquisitions into operations or their
related financings may impact liquidity and capital resources; the impact of
labor disruptions and changes in Cooper’s relationship with, or ownership
interests in, joint-venture partners; the ability to sustain operations at the
Cooper Chengshan (Shandong) Tire Company Ltd. joint venture (“CCT”), including
obtaining financial and other operational data of CCT; the inability to obtain
and maintain price increases to offset higher production or material costs;
inability to adequately protect Cooper’s intellectual property rights;
inability to use deferred tax assets; the ultimate outcome of legal actions
brought by Cooper against wholly-owned subsidiaries of Apollo Tyres Ltd.; and
other factors that are set forth in management’s discussion and analysis of
Cooper’s most recently filed reports with the SEC. This list of factors is
illustrative, but by no means exhaustive. All forward-looking statements
should be evaluated with the understanding of their inherent uncertainty.

Contact:

Cooper Media Contact:
Anne Roman, +1 419-429-7189
alroman@coopertire.com
or
Cooper Investor Contact:
+1 419-424-4165
investorrelations@coopertire.com
 
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