Russian fund seeks to exit Voltyre venture with Titan

Quincy, Illinois – An affiliate of Russian Direct Investment Fund (RDIF), one of three shareholders of Voltyre-Prom, has notified Titan International Inc. it is exercising a 'put option' on its share in the Russian tire maker, which could be worth up to $76.2 million (€66.9 million).

The move obligates Titan to buy RDIF’s shares in Voltye-Prom at a predetermined value, an obligation Titan can settle either with cash or in Titan common stock.

The cash option would range from $74.3 million to $76.2 million, while the stock option would represent just shy of 10.2 million up to slightly more than 10.4 million shares, Titan said.

Voltyre-Prom operates a 2 million-sq.-ft.-plus factory in Volgograd, Russia, that produces agricultural and industrial tires.

Capacity there is rated at 2 million tires per year, according to information released in 2013, when Titan, RDIF and One Equity Partners bought majority ownership of the plant from JSC Cordiant.

The partners paid about $94 million, including the assumption of an undisclosed amount of debt, for their stake. They took over 100% control in 2014.

RDIF is a $10-billion fund established by the Russian government to make equity investments primarily in the Russian economy, while EOP is a global private equity fund and a subsidiary of JP Morgan Chase & Co.

At this time, OEP has not given notice of its exercise of put rights pursuant to the shareholders' agreement, Titan said, but it may do so through 9 Jan, 2019.