07
May
2003
|
00:00
Europe/Amsterdam

Pirelli & C. Shareholders Meeting approves financial statements and merger project

THE SHAREHOLDERS' MEETING OF PIRELLI & C. HELD TODAY:

  • 2002 FINANCIAL STATEMENTS OF PIRELLI & C APPROVED

  • THE APPROVAL OF THE TRANSFORMATION OF THE COMPANY FROM A LIMITED PARTNERSHIP TO A LIMITED PUBLIC COMPANY

  • THE APPROVAL OF THE CAPITAL INCREASE FOR AN EQUIVALENT VALUE OF 1 BILLION EURO WITH FREE WARRANTS FOR ADDITIONAL 250 MILLION EURO

  • THE PROJECT TO MERGE PIRELLI SPA INTO PIRELLI & C APPROVED WITH AN EXCHANGE RATE OF 4 NEW PIRELLI & C. ORDINARY SHARES FOR EVERY 3 PIRELLI SPA ORDINARY SHARES AND 10 NEW PIRELLI & C. SAVINGS SHARES FOR EVERY 7 PIRELLI SPA SAVINGS SHARES

  • AFTER THE MERGER PIRELLI GROUP WILL HAVE A STRONGER AND SIMPLIFIED STRUCTURE WITH AN OPTIMIZED INCOME PROFILE WITH A WIDER SHAREHOLDER BASE AND A GOVERNANCE IN ACCORDANCE WITH BEST PRACTICE

  • THE GENERAL MEETING APPOINTED THE NEW BOARD OF DIRECTORS OF PIRELLI & C. SPA

  • THE BOARD OF PIRELLI & C. SPA MEETS:

  • THE FOLLOWING APPOINTMENTS MADE: MARCO TRONCHETTI PROVERA, CHAIRMAN; ALBERTO PIRELLI AND CARLO PURI NEGRI VICE CHAIRMEN; CARLO BUORA AND GIOVANNI FERRARIO MANAGING DIRECTORS

  • LEOPOLDO PIRELLI CONFIRMED HONORARY CHAIRMAN

Milan, 7 may 2003 - The Shareholders' Meeting of Pirelli & C. met today in ordinary and extraordinary session.

In ordinary session the General Meeting of Pirelli & C. approved the Financial Statements for the fiscal year 2002 of the and the distribution of a dividend of 0.08 euro per ordinary share and 0.0904 euro per savings share that will be payable as from 12 June, with coupon detachment on 9 June.

In extraordinary session the Shareholders' Meeting of Pirelli & C. passed the following resolutions.

Transformation of the Company and amendment of its business purpose
The shareholders of Pirelli & C. approved the transformation of the Company from a limited partnership to a public limited company that will have a new corporate structure and as such will enable a more significant participation by all the shareholders in the decision-taking process.

The Shareholders Meeting has also approved the change in the business purpose of the Company in order to emphasize the role played by Pirelli & C. in the framework of the Group, that is of a financial holding company having functions of control and guidance of the affiliated companies.

As a result of the change in the type of company and its business purpose the shareholders of Pirelli & C. will have the right to withdraw - according to the terms and conditions specified in the attachment - which must be exercised before the increase in the share capital. The shareholders who withdraw will not receive any dividend nor will they enjoy the option rights regarding the share capital increase described below.

Share capital increase
The shareholders have approved a share capital increase of Pirelli & C. for a maximum cash amount of 1.014 million euro by the issue of 1,950,355,809 new ordinary shares, with dividend calculated as from 1 January 2003, to be offered to shareholders at a par value of 0.52 euro per share on the basis of 3 new ordinary shares for each share of any type held.
Each new share subscribed will be issued with a free warrant attached thereto valid for subscribing, continuously, with effect from 1 January 2004 up to 30 June 2006 and regular dividend, one ordinary share for every 4 warrants presented for the exercise, at the price of 0.52 Euro per share; the proceeds will be up to 254 million Euros.

Pirelli & C. intends to use the new resources raised by the increase in share capital for the reinforcement of the company's equity and finances as well as for sustaining the industrial and financial projects of the Group.

The participants in the Shareholders' Agreement of Pirelli & C. have undertaken to subscribe for the new shares to which they are entitled according to the proportion of the shares held. The remaining amount of the share capital increase will be subscribed for by a underwriting syndicate arranged and directed by Mediobanca.

Merger of Pirelli & C. Luxembourg and Pirelli SpA into Pirelli & C.

The Shareholders' Meeting later approved the merger project with the incorporation of Pirelli & C. Luxembourg (wholly controlled company) and of Pirelli SpA into Pirelli & C on the basis of the following exchange rates:

  • number 4 Pirelli & C. new ordinary shares for every 3 ordinary shares of Pirelli SpA;
  • number 10 Pirelli & C. new savings shares for every 7 savings shares of Pirelli SpA.
    The newly issued shares will have right to dividend on 1 January of the year on which the merger takes effect with respect to third parties.
    .
    This exchange ratio was calculated, taking into account the nature of listed holding companies of Pirelli & C. and Pirelli SpA as well as Pirelli & C. share capital increase, on the basis of the stock exchange quotations of the two companies and the analytic valuations conducted using the methodology of the sum-of-the-parts (the so-called net asset value). Mediobanca has provided assistance in the study and execution of the operation as well as in the valuation of the exchange ratio of Pirelli & C..

In order not to prejudice the equity rights of Pirelli SpA shareholders, the privileges of the holders of Pirelli & C. savings shares will be brought into line with those enjoyed by Pirelli SpA saving shares holders (preferential dividend on profits amounting to 7% of par value)

Objectives
The foregoing operations will altogether enable the Company to:

  • simplify and reinforce the corporate structure of the Group not only by transferring all the principal activities (Telecom and Energy Cables, Tyres, Real Estate and investments in telecommunications through Olimpia) to a single listed holding company but also through the infusion of new capital;
  • the transformation from a limited private partnership to a public limited company with the adoption of the most advanced form of corporate governance will give the shareholders a more significant participation in the decision-making process;
  • the creation of bases for development as well as for a more flexible management of the assets in portfolio;
  • the optimization of economic and financial flows within the framework of the Group and vis vis the shareholders;
  • simpler management of administrative operations.

In ordinary session the Shareholders' Meeting, as a result of the disappearance of the figure of private partners following the transformation of the Company into a public limited company decided that the members of the Board should be 22 and appointed the following directors: Marco Tronchetti Provera, Alberto Pirelli, Carlo Alessandro Puri Negri, Carlo Buora, Giovanni Ferrario, Carlo Acutis, Gilberto Benetton, Carlo De Benedetti, Alberto Falck, Gabriele Galateri di Genola, Giuseppe Gazzoni Frascara, Mario Greco, Georg F. Krayer, Giulia Maria Ligresti, Massimo Moratti, Luigi Orlando, Giovanni Perissinotto, Giampiero Pesenti, Ennio Presutti, Maurizio Romiti, Vincenzo Sozzani and Frank Vischer.
Leopoldo Pirelli was reconfirmed as honorary chairman of the Company

Following the resignations presented on April 2nd 2003 of all the Statutory and alternate auditors so that the minority shareholders could present their own lists, the Shareholders' Meeting also appointed on the basis of voting lists, to take effect from the date on which the merger comes into force, a new Board of Auditors made up as follows: Luigi Guatri, Paolo Lazzati e Roberto Bracchetti, Statutory Auditors, Franco Ghiringhelli e Sebastiano Guido, Alternative Auditors.

Also in ordinary session the Shareholders' Meeting passed a resolution to authorize - for an 18 month period - the acquisition of the Company's own shares within the maximum statutory limit of 10% of its pro tempore share capital, after the revocation of the resolution passed by the Shareholders' Meeting of May 13th insofar as this has not been utilized.

At the conclusion of the Shareholders' Meeting the Board of Directors of Pirelli & C. SpA met and appointed Marco Tronchetti Provera Chairman; Alberto Pirelli e Carlo Alessandro Puri Negri Vice-Chairmen; Carlo Buora e Giovanni Ferrario Managing Directors.

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