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Yokohama gets SEC nod to boost tire production

Japanese-owned Yokohama Tire Philippines Inc. got the nod of the Securities and Exchange Commission (SEC) to boost its capital stock, in view of the company’s plan to increase annual production of its plant.

The company aims to raise local production to 7 million tires by September 2006.

The commission en banc, the SEC’s highest decision-making body, said in a document furnished reporters on Thursday that Yokohama’s increase of capital stock from P625 million to P2.2 billion "may be given due course."

An increase in capital stock, which is the number of shares authorized for issuance by a company’s charter, allows a firm to use the additional proceeds for investment in projects or equipment, thus raising its profits and/or efficiency.

Yokohama’s Japanese parent firm announced last year it will invest 10 billion yen to expand its yearly tire production capacity beginning October this year. The company has a plant at the Clark Special Economic Zone in Pampanga.

In the document it submitted to the SEC, the company’s Philippine unit said at least P1.111 billion of the net increase in authorized capital stock of P1.575 billion has been paid in cash by the parent company.

The company said the money, equivalent to $20 million, has been received by the Mizuho Corporate Bank Ltd. in January, at the Bangko Sentral ng Pilipinas reference rate of P55.552.

The P1.111 billion, according to Yokohama’s special audit report, "may be considered fresh and additional capital infusion."

Yokohama was established in 1996 as a joint venture between Yokohama Rubber, which invested 80 percent of the capital, and JFE Shoji Trading Corp. (then Kawasho Corp.), which invested the remaining 20 percent, for manufacturing passenger car tires for export markets.

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The Bridgestone Potenza RE750 is an Ultra High Performance Summer tire that was developed for the drivers of sports cars and sporty coupes to provide traction on wet and dry roads. It uses Bridgestone's UNI-T network of technologies to improve three primary factors of the tire's performance: the bead, casing and tread compound.

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