MILAN (Reuters) - Italian tiremaker Pirelli said on Friday it had moved forward its plans to list on a stock exchange to the last quarter of 2017 and its controlling Chinese investor was willing to cut its stake to below 50 percent in the initial public offering (IPO).
The company was delisted from the Milan bourse in 2015, where its shares had traded since 1922, following a mandatory offer launched by an investment vehicle controlled by China National Chemical Corp (ChemChina).
Pirelli had expected to list in the first half of 2018 but brought the plans forward due to favorable market conditions and after agreeing a series of steps that will reduce its net debt to core earnings ratio to below three.
Pirelli is expected to re-list in Milan or a leading international stock exchange, the company said in a statement.
“(ChemChina) confirmed its willingness, for the greater success of the IPO, to go below 50 percent,” Pirelli said, adding that ChemChina would continue to consolidate the tiremaker on its balance sheet even without a majority stake.
State-owned ChemChina holds a 65 percent stake in Marco Polo International Italy, the sole shareholder in Pirelli. Camfin, an Italian holding company whose investors include Pirelli boss Marco Tronchetti Provera, Italian banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), has 22.4 percent and an investment fund linked to Russia’s Rosneft (ROSN.MM) owns the rest.
The steps Pirelli plans to carry out in the context of the listing include a capital increase, the repayment of some debt and the refinancing of credit lines, the company said.
It said Marco Polo would be granted 1.25 billion euros ($1.4 billion) in bank financing to be repaid with the IPO proceeds. Pirelli would launch a 1.2 billion euro capital increase underwritten by Marco Polo to repay the same amount of debt and 4.2 billion euros of Pirelli’s credit lines would be refinanced to reduce the cost of its debt and prolong its average maturity.
Reporting by Agnieszka Flak; editing by David Clarke