Cooper Tire hearing on China joint venture dissolution postponed
According to Bloomberg, a Chinese court has pushed back a hearing on Cooper Tire’s joint venture with a Chinese tire maker to an undetermined date.
In July, the Chengshan Group moved to dissolve its joint venture with Cooper, which has a 65 percent stake. A jointly run plant in Rongsheng, China, called Cooper Chengshan (Shandong) Tire Co. was founded in 2006.
The 5,000 Chinese workers there since mid-July have refused to make Cooper-branded tires to protest Cooper’s impending acquisition by India-based Apollo Tyres. The Chinese don’t think the $2.5 billion deal is a good one, and they’ve expressed their doubts about the deal. They also cite cultural differences.
Apollo is planning to fund the purchase partly through a $1.875 billion sale of high-yield bonds issued by Cooper. The timing of the bond sale will be determined this week, Apollo CFO Sunam Sarkar said yesterday.
The venture earned $106.5 million in pretax profit in 2012, according to its union. By comparison, Cooper’s pretax income almost tripled to $368 million last year.