Tiwheel Set To Command Up To 10 Per Cent of US OEM
Tiwheel Set To Command Up To 10 Per Cent of US OEM Wheel Market In Wake Of
Kentucky Plant Acquisition
Tiger Wheels Limited
(Incorporated In The Republic Of South Africa)
(Registration Number 1970/011662/07)
(`Tiwheel` Or `The Company`)
Share CODE: TIW & ISIN Number: ZAE000007407
Tiwheel Set To Command Up To 10 Per Cent of US OEM Wheel Market In Wake Of
Kentucky Plant Acquisition
JSE-listed international automotive alloy wheel manufacturer Tiger Wheels
(Tiwheel) has reinforced its position in the North American market with the
acquisition - for US$24-million - of a state-of-the art large-diameter wheel
plant in Kentucky that is dedicated to supplying Ford motor manufacturing plants
in Detroit, Louisville and elsewhere.
The acquisition - which was made by Tiwheel`s 74 per cent-owned German-based
wheel manufacturing business, ATS Beteiligungs GmbH - is at a large discount to
the US$45-million book value of the assets bought (from Australia`s stock
exchange-listed ION Group, which is under administration).
The deal will take the US OEM alloy wheel market penetration of Tiwheel - which
already has a manufacturing facility at Auburn, Alabama - to between five and 10
per cent by the end of 2006, says ATS CEO Siegfried F Teichert.
He also revealed that Tiwheel has immediately committed to investing
a further US$16-million on more than doubling the capacity of the Kentucky plant
from 600 000 to 1,4-million wheels a year within the next 12 months.
In terms of the sale agreement, a further amount of up to US$4-million may be
payable to the seller over the next two years in line with the achievement of
production targets.
The acquisition will be funded by existing resources and long term loans to be
raised by ATS from its global bankers.
Outlining the rationale behind the deal, Teichert said:
`Firstly, apart from the highly favourable financial terms, it would have taken
many years for our Alabama plant to achieve a reasonable market share in Detroit
- the vehicle manufacturing capital of the US.
`Secondly, Kentucky provides the opportunity for Tiwheel to obtain a meaningful
share of the large diameter wheel market from a site close to major US motor
manufacturers.
`What is more, it enables us to further expand the high-tech process efficiency
developed in Germany into the US wheel manufacturing environment and, at the
same time, to bring into our fold a wheel production team with a wealth of
experience and a depth of knowledge of the North American wheel market.`
Ends
From Greg Kukard - Tel (011) 444-6900
11 August 2005
Sponsor: Sasfin Bank Limited
Date: 11/08/2005 01:15:07 PM
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