Dec. 8 (Bloomberg) -- Cooper Tire & Rubber Co., a U.S. tiremaker, will buy a Serbian maker of car tires and pledged to increase production sixfold within a few months.
Cooper will take over a unit of Trajal Korporacija AD from Brikel EAD of Bulgaria for $13 million and invest as much as $50 million, Serbian Economy Minister Nebojsa Ciric said today after signing the agreement, mediated by the government, in Belgrade today.
Current annual production of 500,000 car tires will increase to 3 million tires a year by the end of the first quarter as Cooper plans a swift takeover, said Vice President Harold Miller, in charge of the Findlay, Ohio-based company’s international tire segment. Employment will rise eventually to 700 from 500 initially.
The other, smaller part of Trayal that makes tires for trucks and bicycles will remain majority-owned by Brikel, with the government becoming a 24 percent owner as it agreed to convert what Brikel owes in back taxes into equity.
Trayal’s net loss widened to 1.2 billion dinars ($15.47 million) in 2010 from 947 million dinars in the previous year, on operating revenue of almost 3 billion dinars. It’s the second-biggest tiremaker in Serbia after Michelin & Cie.-owned Tigar Tyres in Pirot.
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