Pirelli Shareholder Camfin Negotiates Capital Increase

Camfin SpA, the largest shareholder in Pirelli parent company Pirelli & C SpA, has negotiated with its banks regarding a 100 million euro capital increase and a rescheduling of its debt. Camfin’s controlling shareholder GPI, along with a consortium of banks, will guarantee all of the capital increase, Reuters reported. Three new directors will also be appointed to Camfin’s board, making a total of 15 directors.

The banks participating in the debt deal include Banco Popolare, UniCredit, Banca Monte dei Paschi di Siena, Intesa Sanpaolo SpA and Banca Popolare di Milano. “The agreement foresees in addition that up to end of 2011 there will be no dividend distribution and that by 2012 the 49 per cent stakes in Pirelli & C Ambiente SpA and Pirelli & C EcoTechnology are sold,” the company said.

The capital increase comprises 70 million euros in shares to be issued by the end of the year and 30 million euros of warrants which will be exercisable in 2011. The deal also calls for issuance of 420 million euros of new financing to Camfin subsequent to the capital increase. The debt deal includes a “standstill” on existing debt repayments and maintenance of existing credit lines.

Camfin, which is majority-controlled by businessman Marco Tronchetti Provera, had net debt of 577 million euros at the end of March. Camfin owns 26.5 per cent of Pirelli, according to market regulator Consob.