CHICAGO -- Goodyear Tire & Rubber Co., facing a U.S. Securities and Exchange Commission investigation into its planned restatement of previous financial results, on Thursday said it plans to privately sell about $650 million of senior secured notes.
The No. 1 North American tire maker said it intends to use proceeds to prepay a $538 million U.S. term loan due in 2005, to pay down other debt and for general corporate purposes.
Goodyear said the notes will be in addition to a new $650 million term loan mentioned earlier this month and in its disclosure Wednesday about the SEC probe.
"This is all part of our plan to refinance the bank debt," said Keith Price, a Goodyear spokesman. "We're taking advantage of what we're able to access in the capital markets to get the financing we need to go forward."
The Akron, Ohio, company declined to say when it might complete the term loan or the notes.
It expects the new notes to be secured by junior liens on some collateral that backs its senior secured U.S. credit facilities.
Goodyear declined to comment on whether the note sale would fulfill the terms of its three-year labor contract with the United Steelworkers of America.
That agreement called for the company to sell $250 million in debt and $75 million in equity by the end of 2003. Goodyear was unable to meet that deadline because it discovered accounting problems at its European business unit.
The company said Wednesday that it has expanded the investigation to other overseas operations and will likely delay filing of its 2003 annual financial statement as a result.
The United Steelworkers couldn't be immediately reached for comment.
Goodyear lost more than $1 billion in 2001 and 2002 and is expected to post a 2003 loss.