Pirelli reverse merges with Marco Polo

Pirelli & C. S.p.A. is to officially reverse merge with Marco Polo Industrial Holding S.p.A. This transaction will be submitted to the extraordinary shareholders’ meetings on 15 February 2016, with a view to completing during the first half of 2016.

The move represents the relative completion of the sale, purchase and co-investment agreement between China National Chemical Corporation (ChemChina) and its subsidiary China National Tire & Rubber Co., Ltd. (CNRC), on one side, and Camfin and its shareholders Coinv S.p.A. and Long-Term Investments Luxembourg S.A. (LTI), on the other side, which was agreed on 22 March 2015. That deal saw the partners form Marco Polo Industrial Holding which owns, directly or indirectly, 100 per cent of the ordinary shares of Pirelli (that were delisted on 6 November 2015) and more than 93.2 per cent of the savings shares of Pirelli. Very simplistically, the reverse merger effectively means the partners now own Pirelli rather than Marco Polo.

Owing to the fact that the Marco Polo Industrial Holding and Pirelli deal constitutes “a related-party transaction of major importance”, Pirelli and Marco Polo Industrial Holding will publish a report explaining the reasons justifying the merger. This will also contain an economic and financial plan indicating the source of the financial resources used in the transaction and a description of the objectives intended to be achieved.

In future, the ownership structure of Pirelli resulting from the merger will be as follows:

Marco Polo International Holding Italy S.p.A. (Holdco) will hold, directly or indirectly, No. 202,174,767 ordinary shares, equal to 100 per cent of the share capital represented by ordinary shares and 97.16 per cent of the entire share capital.

Marco Polo International Holding Italy S.p.A. will hold, directly or indirectly, No. 5,085,997 savings shares (or Special Shares in the event the Mandatory Conversion has become effective), equal to 86.05 per cent of the share capital represented by savings shares (or Special Shares in the event the Mandatory Conversion has become effective) and 2.44 per cent of the entire share capital.

Third party shareholders will hold the remaining No. 824,727 savings shares (or Special Shares in the event the Mandatory Conversion has become effective), equal to 13.95 per cent of the share capital represented by savings shares (or Special Shares in the event the Mandatory Conversion has become effective) and 0.4 per cent of the entire share capital.

The treasury shares held in portfolio by Pirelli (No. 351,590 ordinary shares and No. 408,342 savings shares or, if the Mandatory Conversion has become effective, Special Shares) will remain unchanged and are included in the stake of Marco Polo International Holding Italy S.p.A.

Pirelli notes that the above changes would not legally constitute a “change of material shareholding” leading to the need for an early repayment of the 600 million guaranteed euro notes issued by Pirelli International plc and guaranteed by Pirelli Tyre S.p.A.. This is due in 2019 and remains due in 2019.

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