Pirelli seeks consents for 5 1/8% notes due 2016, 1¾% notes due 2019

By Wendy Van Sickle

Columbus, Ohio, Aug. 13 – Pirelli International plc and Pirelli & C. SpA are conducting consent solicitations to amend the conditions of their €500 million of 5.125% notes due 2016 and €600 million of 1.75% notes due 2019, according to two notices.

The issuer is seeking to pass extraordinary resolutions to modify the notes’ conditions in connection with its expected takeover by China National Chemical Corp.

Pirelli said the aim is to “actively manage the potential impact of the transaction” in order to limit the circumstances in which it would have to prepay the debt.

In particular, the company is seeking to prevent an event of default or a change of material shareholding put event.

However Pirelli wishes to give bondholders the right to put the 1.75% notes to the extent that Pirelli is merged and is not the surviving entity.

Specifically, the resolutions include language to:

• Confirm that no change of material shareholding and a related put event shall be deemed to have occurred in connection with the transaction;

• Direct the trustee, Deutsche Trustee Co. Ltd., to waive all potential events of default or any other breach of the trust deed that may occur in connection with any part of the transaction;

• Discharge the trustee from any liability suffered in respect of any act or omission it may have become or may become liable for under the notes documents, the amendment documents or in connection with the extraordinary resolutions; and

• Grant the deputy chairman of Pirelli’s and of Pirelli Tyre SpA’s boards of directors full power to execute any documents and to take any actions required by law in any modification or amendments of the supplemental trust deed.

Each extraordinary resolution requires a majority affirmative vote by at least three-quarters of the voting eligible noteholders. The meetings require a quorum of representatives of at least half the holders of the notes by principal.

Holders who deliver consents will receive a consent fee of 50 basis points for the 1.75% notes and 35 bps for the 5.125% notes if the amendments are passed.

Consents must be delivered by 11 a.m. ET on Sept. 7 for the 1.75% notes and 11 a.m. ET on Sept. 14 for the 5.125% notes.

The meeting for the 1.75% notes issued by Pirelli International under its euro medium-term note program will be held on Sept. 10 in London.

The meeting for the 5.125% notes with Pirelli & C. SpA as issuer will be held on Sept. 24 in Milan.

Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com) and Societe Generale (+44 20 7676 7579 or liability.management@sgcib.com) are the solicitation agents.

Lucid Issuer Services Ltd. (+44 207 704 0880 or pirelli@lucid-is.com) is the tabulation agent.

Georgeson Srl (+39 06 42171 721 or proxy@georgeson.com) is the information agent.

Based in Milan, Pirelli is a tire company with a presence in more than 160 countries.

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