Goodyear to make investments, repay debt with Engineered Products proceeds

Akron, Ohio - Goodyear is considering building new tyre plants in Eastern Europe and Asia along with other investments with the $1400 million (€1043 million) it netted from the recent sale of its Engineered Products unit.

The Akron-based tyre maker did not provide more details about where new plants could be located, their capacity or when they would be built. A spokesman said the firm still is considering exact plans.

Goodyear previously announced other investments in existing tyre factories to increase high value-added capacity by 40 percent globally and increase capacity in existing low-cost plants by 33 percent. The company hopes to have half of its global capacity in low-cost countries by 2012.

Those investments include modernisation projects in its Gadsden, Alabama, and Fayetteville, North Carolina, plants.

Goodyear said it also plans to repay $300 million in debt, saving about $26 million in annualised interest expenses. The firm also expects in the first quarter to repay a further $650 million in secured notes.

“Consistent with what we have been telling investors, the successful completion of the sale of Engineered Products combined with our equity offering in May allows us to expand our future growth investments,” Chairman and CEO Robert Keegan said. “We will continue to use a disciplined approach in allocating capital to high-return investments.”

Goodyear this month completed the Engineered Products sale to EPD Inc., an entity backed by private equity firm Carlyle Partners IV LP for $1480 million.

From Tire Business (A Crain publication)

Press release from Goodyear