AKRON (May 10) — Goodyear said it will make a public offering of 22,549,609 shares, from which it hopes to net $725 million to use to pay down debt and for other purposes.
The company also said it plans to grant the underwriters a 30-day option to buy up to an additional 3,382,441 shares to cover any over-allotments.
Goodyear based the net proceeds amount, after deducting underwriting discounts and commissions, on the $33.26 per share price for its common stock on May 8. The estimated net proceeds would be about $834 million if underwriters exercise their over-allotment option in full.
The tire maker said it intends to use the net proceeds to repay approximately $175 million of its 8.625 percent notes due in 2011, and about $140 million of its 9 percent notes due in 2015. The remaining money would go to general corporate purposes, possibly as investment in its core tire businesses, and to repay other debt.
Deutsche Bank Securities, Citi and Goldman, Sachs & Co. will be joint book running managers for the offering, Goodyear said.