PIRELLI: FUNDS ALREADY IN PROVISIONS FOR THE LIABILITIES RELATIVE TO THE SENTENCE OF THE EU COURT OF JUSTICE REGARDING THE ELECTRICITY CABLES CARTEL
NO ECONOMIC IMPACT, NET CASH FLOW TARGET IN LOWER PART OF RANGE IF FINE PAID THIS YEAR
PIRELLI ASSOCIATED ONLY BECAUSE OF THE PRINCIPLE OF “PARENTAL LIABILITY” EVEN THOUGH IT DID NOT TAKE PART IN THE ACTIVITIES OF THE CARTEL
Milan, Oct. 28, 2020 – The sentence with which the EU Court of Justice today confirmed the prior decisions of the EU Tribunal and EU Commission regarding the investigation into a cartel in the electrical cables market will have no economic impact on Pirelli. The company, as previously announced, has already made the opportune provisions in its risk and charges fund for potential liabilities relative to these proceedings.
It is worth mentioning that in 2014 the EU Commission sanctioned Prysmian, jointly and severally with Pirelli, with a fine of Euro 67,310,000.00. In this respect, Pirelli had already delivered to the EU Commission a bank guarantee in the amount of Euro 33,655,000.00 plus interest.
From the financial point of view, if payment of the fine takes place before December 31, 2020, the Net Cash Flow target announced to the market on August 5, 2020 (Net Cash Flow between about +190 and about +220 million euro), would be respected in the lower part of the range.
The EU Court of Justice has so far rejected all the appeals filed by the entities involved in the antitrust investigation. With today’s decision, it confirmed that Pirelli must answer jointly and severally with Prysmian in application of the principle of so-called “parental liability”. This is because Pirelli held the share capital of Prysmian for part of the period of the cartel’s activity, from 1999 through 2005, even though Pirelli did not have any involvement in the activities of the cartel.
Since 2014, it should be noted, there has been a case brought by Pirelli pending before the Milan Court of First Instance to obtain a declaration that Prysmian has an obligation to hold Pirelli fully relieved of any claim related to the cartel, including but not limited to, the fine issued by the EU Commission.