By Denna Bowman
Michelin tyres is launching a £1 billion rights issue to raise capital and fund expansion in a bid to capitalise on opportunities within emerging markets.
The French tyres manufacturer says it needs to open one factory a year over the next few years to meet demand.
Michelin said its plan was to quadruple sales in developing markets and chief executive Michel Rollier said the group intended to boost sales by a quarter within five years and by half in the next 10 years.
Rollier announced the fund-raising as he declared that the recession in the global automotive industry was over.
Michelin, which is already due to open three new factories in 2012, will use the money to fund an investment programme, he said.
Mr Rollier added: “The opportunities are there and Michelin is now ready to seize them. The crisis is over.”
His positive outlook follows two consecutive years of falling profits.
However, investors were unnerved by the 2-for-11 cash call at a deeply discounted price of 45 euros, compared with Michelin’s share price of 60 euros and its share price took a knock during the day.