Pirelli approves Olimpia new shareholder
OLIMPIA BROADENS ITS SHAREHOLDER BASE AND
REINFORCES ITS BALANCE SHEET AND FINANCIAL STRUCTURE
Transaction execution put to Olimpia Board of
Directors for approval
Hopa becomes new shareholder with 16%
stake.
Olimpia receives same premium previously obtained by Bell.
Early repayment of 1 billion euro nominal value bond.
Olimpia will own 19.99% of Holinvest.
Total Olimpia and Hopa shareholding in Olivetti will be less than
30%
Milan, 19 December 2002 – The Board of Directors of
Pirelli SpA has approved a transaction that will see the
broadening of its shareholder base and a consequent
strengthening of the company’s balance sheet and financial
structure (as detailed in the attachment). The strengthening
follows that already achieved in October 2001 with the
renegotiation of the original agreement of July 2001 for the
acquisition from Bell of its Olivetti shares.
The transaction foresees Hopa receiving early repayment
of the 1 billion euro nominal value bond issued by Olimpia and
falling due in 2007, repayable in Olivetti shares, and the
merger by incorporation into Olimpia of Holy, a company 100%
controlled by Hopa. In return for the transfer of this company,
whose net asset value is approximately 960 million euros, Hopa will
receive a 16% stake in Olimpia. The transaction therefore
recognises to Olimpia’s shareholders the same premium paid by them
to Bell in July 2001 when acquiring Bell’s shareholding in
Olivetti.
Following the merger, Olimpia’s share capital will be structured
as follows:
- Pirelli 50.4%
- Edizione Finance International 16.8%
- Hopa 16%
- Banca Intesa 8.4%
- Unicredito 8.4%
As a result of the transaction, Olimpia will achieve the
following important objectives:
- The strengthening of its balance sheet through a 476
million euro reduction in its debt (following the early repayment
of the bond); an increase in its net asset value of approximately
960 million euros following the merger with Holy and the
improvement of its financial position through an increase in
liquidity of approximately 99 million euros that will occur
following the merger with Holy. This will see gearing improve from
0.7 to 0.5. - The achievement of improved flexibility as a result of
the cancellation of restrictions and interest payments linked to
the bond issue being cancelled.
The repayment of the bond and the merger between Olimpia and
Holy will take place in the manner described below.
- Olimpia will offer bond holders early repayment of their loan
via the transfer not only of Olivetti shares, as foreseen, but with
a combination of approximately 99 million Olivetti shares and
approximately 164 million Olivetti convertible bonds; - Holy, at the point of merger, will have liquidity of
approximately 99 million euros, approximately 100 million Olivetti
shares, approximately 164 million Olivetti bonds, as well as the
19.99% holding in Holinvest; Holy will have a net asset value of
approximately 960 million euros; - Holinvest, the remaining 80.01% of which will be owned directly
by Hopa, will hold approximately 135 million Olivetti convertible
bonds, 1.5% 2001-2010, approximately 164 million Olimpia bonds,
1.5% 2001-2007 and 486 million bonds issued by a highly
creditworthy counterparty linked to 486 million Olivetti shares.
Holinvest will have 722 million euros of debt.
It is also envisaged that there will be a separate shareholder
agreement between Hopa and the shareholders in Olimpia.
Under the new shareholder agreement Hopa will have the right to
name one director to the board of Olimpia and to each of the main
companies in the Olivetti group. Hopa will have no right of veto
over Olivetti. Should there be a disagreement on any extraordinary
operation or regarding failure to respect certain ratios at Olimpia
(debt/equity 1:1), Hopa will have the right to require that Olimpia
be split, while Olimpia will have the right to require that
Holinvest be split. As a consequence, Hopa would receive its
proportional share of the instruments in Olimpia while Olimpia
would receive its proportional share of the financial instruments
owned by Holinvest. In any event, such a split would not be
possible within 36 months of finalisation of the agreements except
in the case of exceptionally serious events.
Olimpia’s rights as a shareholder in Holinvest will also be
regulated, other than through Holinvest’s own statutes, by an
agreement with Hopa which gives Olimpia the right of veto over
certain specific matters and extraordinary shareholder meeting
motions. It is also envisaged that there will be lock-ups and
rights of pre-emption in relation to the financial instruments held
by Holinvest and tag-along rights of sale in relation to
Hopa’s holding in Holinvest.
Further, Holinvest will retain, for a period 20 months from the
finalisation of the agreements, at least the majority of the
financial instruments and Olivetti convertible bonds. After this,
Olimpia will be given a pre-emption right over the above
instruments and bonds, on equal terms. At the end of the
shareholder agreement Olimpia will receive further pre-emption
rights of a 2-year duration.
The agreement will, however, be subject to the condition that
Hopa, all of its controlled companies and all of its shareholders
linked by their shareholder agreement, will have previously sold
the shares in Olivetti that they own except for a maximum of 1
million shares for each shareholder and that therefore the
aggregate holding of Hopa, Olimpia and of Olimpia shareholders does
not exceed a 30% participation in Olivetti.
On the basis of specific agreements between the shareholders of
Olimpia, Pirelli and Edizione Holding, the latter pro-quota, have
committed that during the life of the shareholder agreement with
Hopa, the debt equity ratio at Olimpia will not fall below 1/1.
Pirelli’s Board of Directors finally agreed to grant to the
Chairman, Marco Tronchetti Provera, and Vice Chairman, Gilberto
Benetton, all the powers necessary to conclude the
transaction.
|
Proforma situation at October 2002
|
30/9/2002
|
post-merger
|
|
|
NUMBER OF OLIVETTI SHARES/CONVERTIBLE BONDS
(Millions) |
2,020
|
3,028
|
3,028
|
|
BOOK VALUE PER OLIVETTI SHARE (Euros)
|
3.92
|
2.78
|
2.78
|
|
NET ASSETS (Euro billions)
|
5.2
|
5.1
|
6.0
|
|
NET ASSETS PER SHARE (Euros)
|
3.33
|
3.20
|
3.20
|
|
NET DEBT (Euro billions)
|
2.8
|
3.6
|
3.1
|
|
GEARING
|
0.54
|
0.71
|
0.52
|
|
DEBT PER SHARE (Euros)
|
1.39
|
1.19
|
1.02
|
Olimpia holds 19,999% of Holinvest
Categories: Institutional Investors