Titan International Inc (TWI) said on Tuesday that it had entered into a definitive agreement to sell its Australian wheel business to OTR Tyres, a domestic tire, wheel and service provider.
The deal is expected to close on March 31st.
The transaction includes gross proceeds and cash to be repatriated of nearly AUD 23 million as well as the assumption of all liabilities, including employee and lease obligations.
The proceeds from the sale are to be used mostly to pay down debt and to pay advisory fees, Titan said.
“In recent years, we took a number of steps to turn around the financial performance in this business, including exiting from the tire servicing business and less profitable products,” Paul Reitz, President and Chief Executive Officer of Titan International Inc, said in a press release.
“Our Australian management team has consistently made decisions to put the business on a good path. In concert with our Board of Directors, we believe the business will be best suited in the hands of a local market leader, which can continue to develop and grow the business going forward. We will continue to operate our undercarriage business in Australia, and the sale of this business will have minimal impact on sales of tires manufactured by Titan,” the CEO added.
Titan International shares closed higher for the seventh time in the past ten trading sessions in New York on Tuesday. The stock went up 1.66% ($0.240) to $14.740, after touching an intraday low at $14.410. The latter has been a price level not seen since March 21st ($14.039).
Shares of Titan International Inc have risen 34.49% so far in 2022, following another 125.51% gain in 2021.