Goodyear says possible accounting problems could delay bond, convertible offerings

By Peter Heap

New York, Dec. 10 - Goodyear Tire & Rubber Co. said it may have to delay its planned offering of at least $250 million in debt and $75 million in equity-linked financing because an internal investigation has identified possible accounting problems.

The Akron, Ohio, tire maker had previously said it was required to issue the debt and convertibles by the end of the year under the terms of its new master contract with the United Steelworkers of America.

If the securities sales are not completed, the USWA has the right to strike after going through a grievance process.

But Goodyear disclosed Wednesday that an ongoing internal investigation has identified "possible improper accounting issues in Europe."

The discovery will delay the company's filing of its amended 2002 form 10-K/A with the Securities and Exchange Commission until next year, the tire maker said in a news release.

In addition, Goodyear said the delay in filing the revised financials could affect its ability to issue the new securities. High-yield market sources had said the bond deal could have been as big as $800 million to $1.2 billion.

Goodyear added that it has begun discussions with the steelworkers union to "explore mutually beneficial options that would include aggressively pursuing financing options, including capital market access, once the amended 2002 Form 10-K/A is filed."

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