Goodyear Announces Offering of Mandatory Convertible Preferred Stock

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Mar 28, 2011, 09:07 ET

AKRON, Ohio, March 28, 2011 /PRNewswire/ --The Goodyear Tire & Rubber Company (NYSE: GT) today announced that it has commenced a public offering of $435 million of mandatory convertible preferred stock, subject to market and other customary conditions.

(Logo: http://photos.prnewswire.com/prnh/20050204/GTLOGO)

The offering consists of 8.7 million shares with an offering price of $50 per share. The company intends to grant the underwriters of the offering a 30-day option to purchase up to an additional 1.3 million shares of mandatory convertible preferred stock.

Unless converted earlier, the mandatory convertible preferred stock will convert automatically into a variable number of shares of the company's common stock on April 1, 2014. The conversion rate will be determined by the price of the company's common stock on that date. The dividend rate and the conversion terms of the mandatory convertible preferred stock will be determined by negotiations between Goodyear and the underwriters.

The company estimates the net proceeds from this offering, after deducting underwriting discounts, commissions and expenses, will be approximately $421 million. The estimated net proceeds would be approximately $484 million if the underwriters exercise their option to purchase additional shares in full.

Goodyear intends to use the net proceeds from the offering to redeem $350 million in principal amount of its outstanding 10.500% senior notes due May 15, 2016 at the redemption price of 110.500% of the principal amount plus accrued and unpaid interest to the redemption date. This redemption is pursuant to provisions of the notes that allow the company, at its option, to redeem up to 35 percent of the original principal amount with proceeds from one or more equity offerings. The company intends to use the remaining net proceeds from this offering for general corporate purposes, which may include the repayment of other outstanding indebtedness.

Goldman, Sachs & Co., J.P. Morgan, Citi and Credit Agricole CIB will be joint book-running managers for the offering.

The offering will be made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offers of the securities will be made exclusively by means of a prospectus supplement and accompanying prospectus. Copies of the prospectus and the prospectus supplement relating to the offering may be obtained from:

Goldman, Sachs & Co.	J.P. Morgan Securities LLC
Prospectus Department	c/o Broadridge Financial Solutions
100 Burma Rd.	1155 Long Island Ave.
Jersey City, NJ 07305	Edgewood, NY 11717
telephone: 917-343-8000	telephone: 866-803-9204

Citi Global Markets Inc.	Credit Agricole Securities (USA) Inc.
Brooklyn Army Terminal	Equity Prospectus
140 58th St., 8th Floor	1301 Avenue of the Americas
Brooklyn, NY 11220	18th Floor
telephone: 800-831-9146	New York, NY 10019
	telephone: 212-408-5680
The Goodyear Tire & Rubber Company
Investor Relations Department
1144 E. Market St.
Akron, OH 44316
telephone: 330-796-3751

Goodyear is one of the world's largest tire companies. It employs approximately 72,000 people and manufactures its products in 56 facilities in 22 countries around the world.

Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, that affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; increases in the prices paid for raw materials and energy; pension plan funding obligations; actions and initiatives taken by both current and potential competitors; deteriorating economic conditions or an inability to access capital markets; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; the adequacy of our capital expenditures; a labor strike, work stoppage or other similar event; our failure to comply with a material covenant in our debt obligations; potential adverse consequences of litigation involving the company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

SOURCE The Goodyear Tire & Rubber Company