MILAN, Dec 18 (Reuters) - Tyremaker Pirelli said on Thursday nearly all holders of its 500 million euro ($587 million) bond expiring this month have chosen to convert it into new shares in the company
Pirelli's Bond Conversion Impacts Sinochem and Camfin Stakes
MILAN, Dec 18 (Reuters) - Tyremaker Pirelli said on Thursday nearly all holders of its 500 million euro ($587 million) bond expiring this month have chosen to convert it into new shares in the company, diluting the stakes held by the group's existing investors.
Pirelli said in a statement that holders have opted to convert bonds into shares for 99.3% of the bond's total value, at the price of 5.8493 euros per share that was announced in June.
To meet the conversion, Pirelli will issue a total of around 84.88 million new shares, causing a dilution of the holdings of its shareholders, it said.
The stake of Chinese state-owned Sinochem, Pirelli's largest investor, will be reduced to around 34.1% from 37% now, while that of Camfin - the vehicle of Italian businessman Marco Tronchetti Provera - will dip to 25.3% from 27.4%.
Sinochem and Camfin, Pirelli's two largest shareholders, have crossed swords repeatedly in recent years, with Camfin complaining that Sinochem's stake is hindering the group's U.S. expansion.
Camfin has been authorised by its board to increase its stake in Pirelli up to 29.9% by October next year.
Pirelli said on Thursday the bond's conversion would have a positive impact on its debt, improving its 2025 net financial position by over 496 million euros.
($1 = 0.8522 euros)
(Reporting by Giulio PiovaccariEditing by Keith Weir)
