Press Release
Apr. 12, 2011
TOYO TIRES TO ACQUIRE 75% EQUITY INTEREST IN CHINA-BASED TIRE MANUFACTURER, SHANDONG SILVERSTONE LUHE RUBBER & TYRE CO., LTD.
Osaka, Japan- April 12, 2011– TOYO TIRE & RUBBER CO., LTD. (President and CEO: Kenji
Nakakura, the “Company”) announces a decision by its Board of Directors today to acquire a
75 % (Seventy-Five percent) equity interest in China-based tire manufacturer, Shandong
Silverstone Luhe Rubber & Tyre Co., Ltd. (“SSLRT”).
The Company has been working to improve its corporate value through a long-term global
growth strategy. Through this acquisition, the Company will now be in a position to supply truck
and bus tires from SSLRT, and passenger car tires from the Company’s new factory which is
under construction in Jiangsu province (Toyo Tires Zhangjiagang Co., Ltd.) This will in turn
enable the Company to meet strong demand in rapidly expanding markets in China and
elsewhere.
The Company plans to commence production of TOYO TIRES at this new subsidiary as soon
as practicable. The goal is to establish an optimal tire supply system, not only for China, but for
all of our overseas markets.
Overview of SSLRT
| Entity Name: | Shandong Silverstone Luhe Rubber & Tyre Co., Ltd. |
| Location: | Luzhou Zhucheng River Industrial Park, Shandong Province, China |
| Representative: | Chan Ho Wai, Chairman |
| Business: | Manufacture and distribution of motor vehicle tires |
| Paid-in Capital: | 330,138,000 RMB (4,186 million Yen) |
| Date Established: | December 21, 2004 |
| Manufacturing Capacity: | 400,000 units annually |
| Employees: | 500 |
| Current Shareholder: | Lion Rubber Industries SDN. BHD. (“LRI”; Malaysia) holds 100% of the outstanding shares of SSLRT. |
Financial Information of SSLRT for the Last 3 Fiscal Years:
| 2008 Fiscal Year (1-1-08 to 12-31-08) |
2009 Fiscal Year (1-1-09 to 12-31-09) |
2010 Fiscal Year (1-1-10 to 12-31-10) |
|
|---|---|---|---|
| Net Assets | 164,991,000 2,092 million Yen |
152,060,000 1,928 million Yen |
115,306,000 1,462 million Yen |
| Total Assets | 400,663,000 5,080 million Yen |
412,720,000 5,233 million Yen |
441,776,000 5,602 million Yen |
| Sales | 217,144,000 2,753 million Yen |
239,334,000 3,035 million Yen |
398,045,000 5,047 million Yen |
| Operating Profit | (61,729,000) (783 million Yen) |
(15,808,000) (200 million Yen) |
(36,749,000) (466million Yen) |
| Net Profit | (59,201,000) (751 million Yen) |
(12,931,000) (164 million Yen) |
(36,754,000) (466 million Yen) |
(Units: RMB; 1 RMB = 12.68 Yen as of March 31, 2011)
Company’s Equity Interest in SSLRT; Acquisition Price
| Equity Interest before Acquisition: | 0 % of total outstanding shares |
| Equity Interest to be Acquired: | 75 % of total outstanding shares |
| Equity Interest after Acquisition | 75 % of total outstanding shares |
| Acquisition Price: | US$21,586,254 (JPY1.795B*)
(*US$ = JPY83.15 as of 3.31.11) |
Acquisition Schedule
| Date of Resolution of Company Board Meeting: | April 12, 2011 |
| Date of Acquisition Agreement: | April 12, 2011 |
| Estimated date of Acquisition Closing: | Early June 2011 |
Future outlook
The Company is assessing the impact, if any, that this acquisition may have on its business results for the fiscal year ending March 31, 2012, and will make additional disclosures as may be required under the Tokyo Stock Exchange Timely Disclosure Rules.
Disclaimer
No information on this news release is intended as either an offer to sell, or a solicitation of an offer to buy, any securities of TOYO TIRE & RUBBER CO., LTD. When making any investment decision, investors should review securities reports, filed or submitted by the Company with the relevant regulatory authorities, and should exercise their own judgment in making their investment decisions. Furthermore, with the exception of historical facts, any current plans, strategies or beliefs held by TOYO TIRE & RUBBER CO., LTD. as expressed in this news release shall be considered a forward-looking statement. These statements are based on management's assumptions and beliefs in light of the information currently available. The assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements.
Toyo Tire Corporation
Corporate Communications Dept.
Hyogo Head office Telephone: +81-72-789-9100 Facsimile: +81-72-773-3272
