Photo shows Goodyear's silent armour tyre. The Jamaican subsidiary of Goodyear pulled from Jamaica in 2008 and says it will start compensating shareholders by year end. - File
Shareholders of Goodyear Jamaica Limited, which is in liquidation, can expect an interim payout before year's end, according to liquidator Anura Jayatillake of Deloitte Touche Tohmatsu in Jamaica, a year after the tyre company announced that it would shutter its operations and exit Jamaica for good.
"We are planning to make an interim distribution, which will be $3.75 per share, and we are hoping to do so by the end of October or early November," said Jayatillake, without disclosing the full payment.
At $3.75 per share, the first payout would amount to $222.75 on Goodyear Jamaica's 59.4 million issued shares.
The company's stock market value at delisting was $193.644 million, based on a share price of $3.26.
MAJORITY OF PAYOUT COVERED
Jayatillake, who is joint liquidator with Deloitte colleague Audley Gordon, said the distribution would cover the larger portion of the payout to shareholders.
Goodyear opted for voluntary liquidation in 2008, nearly two years after a fire consumed its inventory from which the company never fully recovered. It reported a net loss of $48 million at financial year ending December 31, 2008.
The company began business in Jamaica in 1965 as a manufacturer of tyres, operating a plant in Morant Bay, St Thomas, since 1967, but scaled back operations in 1995, locked down the factory and retreated to Kingston as distributor of tyres made by sister operations elsewhere and focused on sales and marketing for Goodyear's Caribbean business.
80% on the dollar
Jamaican shareholders at announcement of the liquidation were told to expect at least 80 per cent compensation per dollar of assets liquidated after debt repayments.
Goodyear has already paid out $16.4 million on staff redundancy, and, according to its 2008 financials, owed $142 million to group companies and another $76 million in trade payables.
Jayatillake noted that there are approximately 2,643 shareholders on the books but declined to disclose the value of the holdings. Goodyear, however, reported balance sheet assets of $574 million, $452 million of which was in the form of trade and other receivables, $2.5 million fixed assets, and $27 million of inventory.
Asset disposals, the liquidator says, are near complete.
"The collections took longer than expected but now we have collected almost everything," he said.
"Fixed assets in the form of cars, furniture and premises as well as some inventory have been disposed of."
The liquidators' current challenge is locating the 25 per cent of eligible shareholders, for whom they have no current address, but Jayatillake says they are working to resolve it. And negotiations on a "final tax position" are ongoing with the tax department, he said
Goodyear Jamaica's top share-holders include American parent Goodyear Tire & Rubber Company, which will receive over $131 million of the first payout; MF&G Trust & Finance Ltd A/C No 528, National Insurance Fund and LOJ PIF Equity Fund.
Jayatillake said the entire liquidation process is expected to be completed by mid-December or very early in 2010.
sabrina.gordon@gleanerjm.com