Milan, Italy - Pirelli & C. SpA is considering buying back the 39-percent share of its Pirelli Tyre SpA unit it sold last year to a European banking consortium with some of the proceeds of the pending sale of its Olimpia SpA telecom unit.
The company's primary use of these funds will be to reduce debt, Chairman Marco Tronchetti Provera told anlaysts in a conference call earlier this week, but at the same time, he said, â€œI am ready to discuss buying back (the 39-percent stake) in the tyre business, if the price is convenient.â€
Pirelli agreed earlier this year with a consortium of Italian banks and telecom companies to sell Olimpia for about $2950 million. Pirelli expects to reap about $2400 million from the sale, which is expected to close in October. The company's consolidated debt is about $935 million.
Pirelli sold 39 percent of Pirelli Tyre last year to a consortium of six banks for about $950 million.
Mr. Tronchetti Provera also told analysts Pirelli is evaluating acquisition options in India and Russia for the tyre business.
From Tire Business (A Crain publication)