Jan 31 Cooper Tire & Rubber Co said it
could sell its 65 percent stake in its Chinese joint venture to
partner Chengshan Group Co Ltd, clearing the way for the U.S.
tire maker to look for a buyer for itself.
Chengshan Group protested against Cooper's deal to sell
itself to India's Apollo Tyres Ltd by locking out
Cooper management and halting production of Cooper-branded tires
at the Chinese facility, Cooper Chengshan Shandong Tire Co Ltd
Production resumed earlier this month after the merger fell
"If Cooper sells its interest in CCT to Chengshan ... Cooper
will have added flexibility to enter into acquisitions," Chief
Executive Roy Armes said in a statement on Friday.
Chengshan Group had been exploring a bid for Cooper when
Cooper struck the Apollo deal, the company told a court in
Cooper's shares rose as much as 3 percent in premarket
trading on Friday after the fourth-largest U.S. tire maker said
Chengshan Group will have the first option to either buy
Cooper's 65 percent interest in CCT or to sell its 35 percent
interest to Cooper.
If Chengshan Group determined not to exercise either option,
Cooper had the right to purchase Chengshan's stake in the joint
venture, the company said.
The venture would continue as currently structured if
neither company decided to buy the other's interest, Cooper
The options are conditioned on Cooper reporting its
financial results within a "specified timeframe", the company
The company has already delayed reporting its third-quarter
results, scheduled in November, after the Chinese facility
stopped entering financial data into the company's systems. It
said in January it was premature to determine when it would
resume regular financial reporting.
If Chengshan Group elected to buy Cooper's stake in the
venture, the plant would have to continue production of
Cooper-branded products for a minimum of three years, the
Cooper shares have fallen 9 percent since Jan. 10, when the
company said production of Cooper-branded tires had resumed at