Pirelli bidders have two financing options following public offer – report (translated)
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ChemChina and Camfin, the companies launching a public offer on listed Italian tyre manufacturer Pirelli, via vehicle the Marco Polo Industrial Holding, have two financing options following the conclusion of the public offer. An unsourced report in the Italian-language Carlo Festa blog said that the first option would involve some of the debt remaining with Marco Polo.
The debt would only be paid back with dividends from Pirelli, the report said. This option would be the most expensive in terms of interest payments, the item added.
The second option would involve Marco Polo merging with Pirelli and the debt being serviced directly through cash flow, the report also added.
Both the financing options have been drawn up by JPMorgan, the bank that has structured the financing for the public offer, the report noted.
Either of the options could be used whether the public offer succeeds or fails, the report also noted.
There is a possibility that Marco Polo's aim of delisting Pirelli could fail, the report further added. Some investment funds are hoping that the bidders will raise their EUR 15 a share offer but that Marco Polo has said there is no possibility of this happening, the item noted.
ChemChina holds 65% of Marco Polo and Camfin 35%, the item concluded.
Pirelli has a market cap of EUR 7.291bn.
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Source Carlo Festa Blog