QUINCY, Ill. — Titan International Inc. has settled a "put option" claim related to its Voltyre-Prom subsidiary in Russia with a combination of cash and shares of Titan common stock, valued together at $50 million.
Titan paid an affiliate of the Russian Direct Investment Fund (RDIF) — one of the three shareholders of Voltyre-Prom — $25 million in cash and issued 4.03 million shares of restricted Titan common stock to RDIF in a private placement.
At this time, RDIF, through its affiliate, continues to hold its 35.7-percent share ownership in Voltyre-Prom, Titan said, but Titan can recover about a third of the RDIF holding (10.7 percent) by buying back the shares issued to RDIF for $25 million within a year. Titan has retained the right to buy back the newly issued shares from RDIF over a three-year period.
Titan and RDIF are two of the three shareholders in Voltyre-Prom, the Volgograd, Russia-based producer of farm and OTR tires. Titan bought into company in 2013, when the investors consortium took it over from JSC Cordiant group
The third shareholder — an affiliate of One Equity Partners — also has submitted a put option to Titan covering its 21.3-percent ownership stake.
The put option by OEP 11 Cooperatief U.A. obligates Titan to buy OEP's share in either cash or Titan common stock, in amounts set by the shareholders' agreement. One Equity Partners is a New York-based middle market private equity firm that focuses on the industrial, health care and technology sectors in North America and Europe.
Depending on the final settlement date, the cash amount is estimated to be in the range of $45 million to $46.2 million and the share amount range is estimated to be approximately 7.3 million to 7.5 million shares, Titan said earlier.
Titan has yet to disclose its definite offer to One Equity to settle its put option.