Titan announces note exchange agreement

ERJ staff report (TB)

Quincy, Illinois -- Titan International Inc. said it has negotiated an agreement with a note holder of the company's 5.625 percent convertible senior subordinated notes, due 2017, to exchange those notes for common stock.

Titan said the two parties have privately negotiated an agreement to exchange approximately $59.6 million in aggregate principal amount of the convertible notes for up to approximately 6.7 million shares of the tyre and wheel maker's common stock, plus a payment for the accrued and unpaid interest. The final number of shares of common stock to be exchanged will be determined based upon the volume weighted average intraday price of the common stock over a period of five consecutive trading days, beginning today. The parties plan to close the exchange on Jan. 18, according to the Quincy-based company.

The notes to be converted represent approximately 35 percent of the outstanding principal amount. Titan said its total indebtedness will be reduced by about $59.6 million and annual interest payments will be reduced by approximately $3.4 million. Following the exchange, approximately $112.9 million aggregate principal amount of the convertible notes will remain outstanding.

Maurice M. Taylor Jr., Titan's chairman and CEO, called the reduction in the company's interest expense by approximately $3.4 million each year “a good deal for both parties and we appreciate the confidence they have in Titan's future.”

The shares of common stock to be issued in connection with the exchange agreement will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the US absent registration or an applicable exemption from registration requirements, according to Titan, a holding company that owns subsidiaries supplying wheels, tyres and assemblies for off-highway equipment used in agricultural, earthmoving/construction and consumer applications.

From Tire Business (A Crain publication)

Press release from Titan