Unformatted text preview: (sell) several of its very poorly performing divisions. The result of this would be to reduce Sales by $1.2 billion, but also reduce SG&A & DA expenses by $1.3 billion. These divisions had asset value (at book) of $750 million. In the divestiture of these divisions, Goodyear would reduce its liabilities – all IBD - by $500 million. 2. Next, Goodyear would re-lever itself by repurchasing the Shanghai Partner’s 50 million shares of stock plus repurchasing from the public an additional 50 million shares of stock, all at $20.00 each. The funds necessary to pay for the repurchase of the 100 million shares would be from bank loans at 10 percent interest....
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- Spring '09
- Corporate Finance, Goodyear, Internal LBO Problem, poorly performing divisions