ERJ staff report (TB)
Hong Kong -- China Enterprises Ltd. has agreed to sell its shareholding in Hangzhou Zhongce Rubber Co. Ltd. - China's largest tyre maker - to CZ Tire Holdings Ltd. for $94.5 million.
The transaction is being effected by CZ Tire's purchase of the entire issued share capital of China Tire Enterprises Ltd., a wholly owned subsidiary of China Enterprises whose sole asset is the firm's 26-percent interest in the registered capital of Hangzhou Rubber. The sale price values Hangzhou Zhongce Rubber at just $363 million.
The transaction is expected to close on or before Dec. 13.
Little is know about the identity of CZ Tire Holdings. China Enterprises did not elaborate on the identity of the buyer, and an independent search did not turn up any relevant information.
Hangzhou-based Hangzhou Zhongce is China's largest and the 11th largest tyre maker worldwide with 2010 sales of $3.23 billion through its Chaoyang, Goodride, Westlake and Yartu brands.
The company has no single distributorship in North America, choosing instead to sell through direct shipments to multiple distributors/customers.
Based in Hong Kong, China Enterprises is a Bermuda corporation that invests in China-based companies engaged in the sales and manufacturing industry together with financial assets.
Following the sale of its ownership interest in Hangzhou, China Enterprise's assets will consist primarily of the cash that it receives in connection with the sale described above and certain investments in financial assets. The board of directors and management are considering all alternatives available for the use of the cash received in connection with the deal, the company said.
From Tire Business (A Crain publication)
Press release from China Enterprises