MILAN, ItalyPirelli & C. S.p.A.'s board of directors has nominated China National Chemical Corp. (ChemChina) Chairman Ren Jianxin to be chairman of Pirelli, succeeding Marco Tronchetti Provera, who resigned in the wake of ChemChina's acquisition of majority control of Pirelli.
The board also nominated a slate of new board members, including Mr. Ren, to succeed five board members who resigned effective Oct. 19.
Mr. Ren, 57 and chairman of ChemChina since December 2014, said he sees great perspectives for growth on the horizon for Pirelli, which he said represents and will continue to represent Italian technological excellence throughout the world. He also noted that he shares with Mr. Tronchetti Provera a passion for work and a desire to make Pirelli grow even more.
In turn, Mr. Tronchetti Provera, who continues as executive vice chairman, noted that ChemChina offers new opportunities for growth and development thanks to our complementary geographic footprints and the synergies that we will achieve in the Industrial segment.
The outgoing chairman also noted that aligning with ChemChina offers new perspectives of growth above all in Asia and in particular China, markets of great strategic importance for Pirelli.
Also nominated for the board are:
c Yang Xingqiang, vice president of ChemChina since January 2009 and before that vice president of China National Bluestar (Group) Co. Ltd. from 2001 to 2004.
c Zhang Junfang, a professor at Swinburne University of Technology; and
c Wang Dan and Tao Haisu, for whom no biographical information was provided.
They replace Anna Maria Artoni, Didier Casi-miro, Ivan Glasenberg, Petr Lazarev and Igor Soglaev, Pirelli said.
Other board members are: BaiXinping; Ze'ev Goldberg; Andrey Kostin; Elisabetta Magistretti; Paolo Pietrogrande; Alberto Pirelli; Luigi Roth; Igor Sechin; and Manuela Soffientini.
As of mid October ChemChina either had purchased or secured purchase agreements covering nearly 87 percent of Pirelli's ordinary shares, according to a statement issued by Marco Polo Industrial Holding S.p.A., ChemChina's Milan-based entity set up to carry out the acquisition of Pirelli.
Marco Polo secured a number of tranches of stock in early October, pushing the number of shares it now controls to nearly 414 million, according to the statement.
Marco Polo said it intended to pay the owners of the ordinary shares tendered during the offer period on Oct. 20, at which time it would take ownership of the shares.
The purchase price is 15 euros ($17.05 per exchange rates on Oct. 12-13) per share, valuing the entire share package at slightly more than $7 billion.
Meanwhile, ChemChina's pending takeover of majority control of Pirelli will trigger the possibility that creditors of two Pirelli private placement loans worth about $193 million could seek early reimbursement, according to Pirelli.
With Marco Polo having acquired more than half of Pirelli's ordinary capital, the Milan-based tire maker pointed out that this would represent a change of control event that would trigger the early reimbursement clause.
The two financing vehiclesa U.S. private placement worth $150 million and a schuldschein with a residual value of $43 millionare headed by Pirelli International Ltd. and guaranteed by Pirelli & C. S.p.A. and Pirelli Tyre S.p.A. (Schuldschein is a traditional German floating or fixed debt instrument with a typical maturity of two to 10 years.)
Eventual reimbursement requests would be satisfied via already available lines of credit and without the need to resort to new financings, Pirelli said.
Marco Polo is the name of the company that was referred to in ChemChina's original bid agreement as Bidco.
ChemChina, through its China National Tire & Rubber Co. subsidiary, holds indirect ownership of Marco Polo through two other Italian investment vehicles and therefore has been able to oversee the mandatory and voluntary tender offers for the Pirelli shares.
Once ChemChina, via Marco Polo, secures control of the shares now being tendered, it will allow ChemChina to move forward with plans to take the tire maker private.
It also would trigger a series of moves by ChemChina to restructure Pirelli, primarily involving the integration of Pirelli's industrial tire businessmedium truck, agricultural and industrial tireswith those of Fengshen Tyre Co. Ltd., owner and producer of the Aeolus and Windpower brands.