QUINCY, Ill., Dec. 21, 2018 /PRNewswire/ -- Titan International, Inc. (the "Company" or "Titan") announced today that the Company intends to satisfy the settlement put option that was exercised by an affiliate of the Russian Direct Investment Fund (RDIF), one of the three shareholders of Voltyre-Prom, with freely tradeable Titan common stock. After evaluating its options, Titan's Board of Directors determined that it was in the Company's and the shareholders' best interests to satisfy the settlement put option in this manner.
The Company, together with affiliates of One Equity Partners (OEP) and RDIF, owns all of the equity interests in Voltyre-Prom, a leading producer of agricultural and industrial tires, which owns and operates an over two million square foot manufacturing facility located in Volgograd, Russia. As previously announced, RDIF exercised its settlement put option on November 14, 2018, thus obligating the Company to acquire RDIF's equity interest in Voltyre-Prom within 60 days of the notice or within 120 days if regulatory approval is necessary. The Shareholder Agreement provides, if regulatory approvals are required and not obtained within 120 days, Titan's obligation to acquire RDIF's interest shall cease.
The Company believes that the issuance of the Titan shares to RDIF in satisfaction of the settlement put option may require certain regulatory approvals, including, but not limited to, from the Office of Foreign Assets Control (OFAC) due to an RDIF affiliate being on the U.S. Treasury's Sectoral Sanctions List, and various filings with the U.S. Securities and Exchange Commission, including a registration statement, and the New York Stock Exchange.
Chairman of the Board, Maurice M. Taylor, Jr. stated, "The timeline associated with the put option is very tight and the Titan team, headed by CEO Paul Reitz, are working through the holidays and beyond, using all reasonable endeavors to ensure that the necessary regulatory approvals are obtained as soon as practicable. However, if the regulatory approvals are not obtained within the necessary 120 days, which is March 14, 2019, it is Titan's belief, based upon the explicit language in the Shareholders' Agreement, that Titan's obligations cease under the put option. RDIF has known about these requirements from day one and would have been better served to have exercised the put option in July, when it first had the opportunity. I am seeking to meet with RDIF CEO, Kirill Dmitriev, as soon as possible to discuss this matter further, in an effort to achieve the best possible outcome for all parties."
The timeline associated with RDIF's settlement put option:
- July 10, 2018 – RDIF's settlement put option became exercisable;
- November 14, 2018 – RDIF exercised its put option;
- November 26, 2018 – Titan provided RDIF with the valuation notice for the put option;
- December 20, 2018 – Titan provided notice to RDIF that the put option will be satisfied in Titan common stock; and
- March 14, 2019 – expiration of the 120-day requirement to obtain necessary regulatory approvals.
By satisfying the settlement put option in stock, the Shareholder Agreement may obligate Titan to pay cash to RDIF to cover any "shortfall" (i.e., sale proceeds received by RDIF upon its sale of the Titan stock shortly after its receipt of such stock being less than the amount RDIF would have received had Titan paid in cash, rather than stock). There can be no assurance at this time as to the ultimate outcome of the exercise of the put option pursuant to the Shareholders' Agreement and its effect on Titan.
Safe Harbor Statement
This press release contains forward-looking statements. These forward-looking statements are covered by the "Safe Harbor for Forward-Looking Statements" provided by the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "plan," "would," "could," "potential," "may," "will," and other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, these assumptions are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond Titan International, Inc.'s control. As a result, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to; the impact of any exercise of the settlement put option relating to the Company's redeemable non-controlling interest in Voltyre-Prom; actions of domestic and foreign governments; and the other risks and factors detailed in the Company's periodic reports filed with the Securities and Exchange Commission, including the disclosures under "Risk Factors" in those reports. These forward-looking statements are made only as of the date hereof. The Company cautions that any forward-looking statements included in this press release are subject to a number of risks and uncertainties, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events, or for any other reason.
Titan International, Inc. (NYSE: TWI) is a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. Headquartered in Quincy, Illinois, the company globally produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. For more information, visit www.titan-intl.com.
SOURCE Titan International, Inc.