Cooper Tire & Rubber Co. and its Chinese partner have extended the deadline for setting the fair market value of Cooper’s Chinese plant to Aug. 24, 2014.
Cooper announced it has reached an option agreement with Chengshan Group Company Ltd. (CCT) that extends the deadline to determine the plant's fair market value and affirms the process for determining the plant's ownership. The two companies first agreed to the process in January 2014.
“Resolving the future ownership of CCT has remained a priority for our organization as we continue to move forward with our growth plans for China,” says Cooper Chairman, Chief Executive Officer and President Roy Armes.
“Today’s announcement is another step in that process. As we have previously stated, Cooper is confident in our growth plans for China regardless of who owns CCT in the future.”
Once an independent third party delivers a valuation of the plant:
* CCT has the first option, within 45 days, to elect to purchase Cooper’s 65% interest, to sell its 35% interest to Cooper, or not to exercise either of these options;
* If CCT determines not to exercise either of the options, Cooper has the right to purchase CCT 35% interest; and
* In the event that neither party elects to purchase the others’ interest, the joint venture continues as currently structured.
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 tires, for a minimum of three years.
