Pirelli - EGM 24 March 2021
In item 1, the Board of Directors proposes to ratify the appointment of Mr. Angelos Papadimitriou as non-executive Director. Mr. Papadimitriou was appointed as General Manager and Co-CEO of Pirelli on 1 August 2020, but his contract of employment was terminated on 28 February 2021. We strongly regret that the independent representation on the Board will decrease from 53% to 47% according to our guidelines, which is not in line with our minimum requirement of 50%. We also have serious concerns over the nomination process at Pirelli, because the Nominations Committee is chaired by the CEO and does not include any independent members. Therefore, we recommend shareholders to OPPOSE.
In item 2, the EGM is called to approve the convertibility of a €500 million zero coupon equity-linked bond due 2025 reserved to qualified investors, as well as the authorization to increase the share capital by maximum 8.0% to service the conversion of the bonds. Through the convertibility of the bond, the Company will be able to diversify its financial resources, extend the duration of the average bond maturity and strengthening its liquidity. We regret that the Company has issued convertible bonds before receiving the authorization of the shareholders to increase the share capital. However, the amount of the capital increase without pre-emptive rights is reasonable (8.0% of existing share capital in 5 years). Also taking into account the positive effects of the loan on the Company's financial position and the fairness opinion released by the external auditor, we recommend approval.
Pirelli & Co. is a holding company that manages, coordinates and finances the operations of its subsidiaries, which are mainly active in the tyre sector. Other activities relate to the emissions control technologies, renewable energy sources and fashion industries. Co.'s Total Tyre Business is split into: the Consumer Business segment that includes car and motorcycle tyres made for both the original equipment and replacement markets; and the Industrial Business segment that includes truck tyres, tyres for agricultural equipment, made both for the original equipment and replacement markets, and the steel cord business.
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