Pirelli, the Chinese of Sinochem no longer want to clear tires with Tronchetti Provera?
Problems and scenarios after Bloomberg's rumors – denied by the Beijing group – on the sale in the pipeline by the Chinese giant Sinochem of the 37% held in the Pirelli group. Facts, numbers and insights
Uproar over the future of Pirelli: an operation in sight with Brembo to put a patch on the exit of the Chinese Sinochem?
Yet the Chinese giant says: we have no intention of going out.
This is what is happening to Pirelli.
BAG EFFECT FOR PIRELLI
Stock market up well in the start-up phase, in line with the rest of Europe. The Ftse Mib index marks a +0.67% to 27,719 points. Piazza Affari well tuned with gains spread across the entire price list, in a confident climate; expected today for the economic bulletin of the ECB and for the interventions of various exponents of the central bank, while on the macro data we look at the USA where the indicators of work, building sites and the production price are scheduled. In evidence Pirelli, with a gain of 3.90%, after the rumors of a disengagement by Sinochem which holds 37% of the capital , and which caused the share prices to wobble yesterday.
THE INDISCRETIONS ON SINOCHEM OUTPUT FROM PIRELLI
The Chinese holding company Sinochem is considering leaving Pirelli, of which the Chinese giant has 36%. The indiscretion was reported yesterday by Bloomberg creating tension on Bicocca stocks, which suffered a setback in Piazza Affari losing up to 4% before recovering and closing up 1.1%. The probable sale of 37% would be worth around 1.7 billion euro.
SINOCHEM'S DENTAL ABOUT PIRELLI
“The press article according to which Sinochem is evaluating the sale of its stake in Pirelli is not true. Sinochem has no plans to sell its stake in Pirelli." This was stated in a note from the Chinese group which holds the relative majority stake in Pirelli.
PIRELLI'S STRUCTURE WITH SINOCHEM
Sinochem Group and China National Chemical Corporation have merged and manage the controlling share of the Italian group, with 27% in the hands of institutional investors, 14% in Camfin and 9% in the Silk road fund. The Beijing-based group is said to be in the early stages of reviewing its stake in Pirelli and potential buyers, including private equity funds, have shown a preliminary interest. According to rumors, Sinochem would be evaluating a possible sale either en bloc or progressively on the market. "It remains to be understood – commented Il Sole 24 Ore – whether the increase in interest rates which drives up financing costs, and the still high net financial position of Pirelli, could constitute two important issues for the reorganisation".
THE ROLE OF TRONCHETTI TESTS
Pirelli shareholders are bound by a shareholders' agreement renewed last year with a year in advance, which will enter into force in the spring with the approval of the 20220 accounts by the assembly and expires in 2026. The agreement establishes the rights of governance and management which assign the presidency to the Chinese, currently covered by Li Fanrong, and the operational management exercised by the executive vice president and CEO, Marco Tronchetti Provera and by Giorgio Bruno, deputy CEO, to the Italian shareholders.
SECTOR NUMBERS FOR PIRELLI
The shareholders' agreement leaves the hands free to the shareholders for the sale of the shares and "should the hypothesis of a reorganization materialize, the Chinese shareholders should not encounter difficulties in selling their shares", remarked the Corriere della sera : " Pirelli is one of the best-known tire brands in the world and has a strategy focused on the high-end that could be of interest to both larger competitors such as Michelin, Continental or Goodyear, more focused on the consumer market, as well as private equity funds. Pirelli is a group with a turnover of over 5 billion with a profitability of more than 15% and in the high-end range it has double margins compared to the market average”.
FUTURE WITH BREMBO?
“In the recent past – wrote the Corriere della Sera – there was also talk several times of a possible combination with Brembo, today a retail shareholder in Pirelli with 5.2% and the world's leading manufacturer of braking systems, as part of a project for the creation of an Italian pole of intelligent tires, a technological segment in which the Bicocca group is investing heavily".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/pirelli-i-cinesi-di-sinochem-non-vogliono-piu-sgommare-con-tronchetti-provera/ on Thu, 16 Feb 2023 08:41:02 +0000.