Shareholders of Goodyear Jamaica Limited can expect at least 80 per cent compensation per dollar of assets liquidated, net of debt repayments, the company said last Friday at a meeting that voted unanimously for the plan to wind up the Jamaican operation.

The Goodyear Jamaica stock, which last sold for $3.26 on December 19, was suspended from trading Monday, December 22, under rule 411, on the application of the company.

General manager Steven Miller will be leaving Jamaica to take on a new assignment, but it was unclear whether he would wait out the liquidation.

"Steve Miller is currently repatriating to the United States where he will be on special assignment with Goodyear's Latin America Tire business," said an informed source Tuesday.

Special meeting

Twenty shareholders showed for the special meeting in Kingston, Friday that also approved the appointment of Kingston-based Deloitte Touche Tohmatsu as liquidator whose job it will be to convert the company's assets for payout to shareholders.

"Liquidators will now assume control of the business, pay debts and distribute the surplus to shareholders," said Miller.

"Shareholders payout largely depends on the conversion of assets to cash."

Miller said he expected that payments to shareholders would be in the region of 80 per cent to 100 per cent per dollar of net assets.

He had no precise timeline for the completion of the process, but said the liquidators would first evaluate the financial status of the company and then determine how to proceed.

With total assets of approximately $532 million as at October 31, Miller in his presentation to shareholders said that the company was in a position to more than meet its debt obligations, which stands at about $172.6 million or 32 per cent of total assets.

Distribution agreement

Goodyear said that its tyres would continue to be available across Jamaica by virtue of a distribution agreement with Kingston-based Tropical Battery Limited inked in September, and through the independent tyre dealer and car service networks it serves.

However, Miller decline to comment on how much it will cost the company in compensation for the nine full-time and eight contracted staff the company employs.

But, in an earlier email, he said any decisions made affecting them would be guided by Jamaican law.

As for plans announced weeks ago that Jamaica would have been concentrating on developing Goodyear's regional markets, Miller said that those duties would be transferred to another operation, the details of which were not fully available.

Goodyear Jamaica currently provides marketing and administrative support for the eastern Caribbean, which includes the primary markets of Trinidad and Tobago, Barbados, as well as Haiti and The Cayman Islands.

Since January 2007 after fire gutted the warehouse overseen by then distributor Tyre Sales and Services, erasing its inventory, Goodyear Jamaica has been unable to reclaim profitability.

The company, since 2004, has paid flat dividends amounting to $29.7 million per year, but paid none in 2007 when it reported an operating loss of $13.7 million and pretax losses of $21.7 million.

Net loss of $3.9 million

At the end of the company's third quarter financial results net loss amounted to $3.9 million. Revenue in the third quarter also dropped off by 10 per cent, from $327.6 million to $292 million.

At year to date September 30, sales rose by a marginal $14 million to $930 million, but the company also reported pretax losses of $4.5 million over the nine months.

Goodyear Jamaica has 59.4 million shares outstanding, and was last valued by market capitalisation at $194 million.

Its American parent, Goodyear Tire & Rubber Company Limited, owns 35.64 million shares or 60 per cent of the Jamaican operation.

sabrina.gordon@gleanerjm.com