Apollo Tyre slips 9% as Cooper Tire shareholders give nod for merger

NEW DELHI: Apollo Tyre Ltd plunged as much as 8.9 per cent in morning trade on the National Stock Exchange, after shareholders of US-based Cooper Tire & Rubber Co approved its sale to Apollo Tyres Ltd.

The stock slipped on worries about possible high debt of $2.5 billion which also marks as one of the largest US acquisitions by an Indian firm.

At 10:00 a.m.; Apollo Tyre recouped some of the losses and was trading 5.2 per cent lower at Rs 63.10. It has hit a low of Rs 60.70 and a high of Rs 66.60 in trade today on the National Stock Exchange.

Apollo had said that out of a total value of $2.5 billion to fund the acquisition, the Indian arm had taken a loan of only $450 million.

According to media report, the major portion of debt of $2.1 billion would be leveraged on cash flows of Cooper and Vredestein, the company’s Netherlands based arm.

As part of the deal, Apollo Tyres will take over the operations of Cooper, including eight plants and 14,000 employees in different parts of the world.