Pirelli, waiting for Golden Power verdict

The game for the reorganisation of Pirelli is now in full swing. After the round of hearings by the government of the top management of Camfin (25.7%) and Sinochem (34%), the verdict of the Golden Power Commission is expected by 15 April, when the deadline for the technicians to pronounce on the dossier expires. In the meantime, as of today, 17 March, the US regulation on connected vehicles is officially underway, with the preparatory steps linked to the mapping of companies with a significant Chinese presence in the shareholding structure.

The issue over Pirelli's governance 'I am confident that it will be resolved' and that 'the Italia government will do the right things to protect the company'. Andrea Casaluci, ceo of Pirelli, interviewed by Radiocor on the sidelines of the conference 'Lens - Digital and Artificial Intelligence: a strategic priority for Italia and Europe', organised by the Digital Innovation Observatories of the Politecnico di Milano, hopes for a quick solution to the reorganisation of the Bicocca group. 'There are very important hearings going on with the Golden Power. They are gathering all the elements and I am very confident that the best solution for the company's interest will be found,' Casaluci added. As for the desirable way out of the impasse between Bicocca's two major shareholders (Sinochem and Camfin), according to the CEO, "it will have to be a solution that puts Pirelli in a position to market its products and grow in all the world's markets".

As of 17 March, with the introduction of the rules on connected vehicles, the mapping of companies with significant Chinese shareholders will begin in the United States: a first step that in the coming months will lead carmakers to decide which suppliers to choose and thus which technologies to adopt in view of the 2027 models that, as of next year, will have to receive authorisation to be introduced in the US. A scenario that, in the absence of solutions on governance, represents a risk factor for the development of Pirelli's cyber tyre technology due to the significant presence of Sinochem (at 34% according to the latest announcements) in Pirelli's capital. A significant weight to which is counterbalanced by the Italian soul represented by Camfin, which, he reported, has strengthened in recent weeks. Marco Tronchetti Provera's holding company has in fact strengthened its grip on Pirelli, rising to 25.7% of the Bicocca group's capital. On 11, 12 and 13 March, in fact, Camfin bought 1,775,025 shares, equal to about 0.164% of Pirelli, at a weighted average price of between EUR 5.753 and EUR 5.881 per share. Overall, the Mtp/Camfin stake increased from 25.54% to 25.7%. And to incorporate the increase in the shareholding, the group's shareholders' agreement (due to expire on 19 May), which will not be renewed, was also updated. The goal, however, is known to be even more ambitious, with the Italian holding company aiming to reach 29.9% of Bicocca's capital.

Meanwhile, the wait is growing for the verdict of the Golden Power Commission. The technicians' verdict is expected by 15 April, when the regulatory deadline expires, on the eve of the Bicocca group's shareholders' meeting. As reported by Il Sole24 Ore on 28 February, the Golden Power Commission has three hypotheses of intervention on the table to resolve the stalemate between the two strong shareholders of Pirelli. The solutions that would be on the table at Palazzo Chigi include the sterilisation of voting rights, the segregation of the Chinese partner's shares in a national vehicle and, finally, the instrument of the blind trust. These interventions are aimed at reducing the presence of the Sinochem shareholder. On the other hand, according to the same sources, the dossier is a delicate one and Palazzo Chigi is examining the measures under consideration, carefully measuring the technical and legal sustainability of the hypothesised solutions and keeping in mind a general principle: the intervention that will be decided, whatever it may be, must be of such a nature as to avoid any disputes with the Chinese group Sinochem and, above all, must not take the form of an excess of power on the part of the government. From this perspective, we learn, for the technicians working on the dossier at the moment, the trust route would appear to be the most viable at first glance. Hence a series of meetings held in Rome in recent weeks with the top management of Pirelli and its shareholders to understand the actual margins for manoeuvre and to obtain updates on the dossier.

It would seem, therefore, that a definitive solution to the complex game being played out between Pirelli's major shareholders is on the home stretch. Various schemes of agreement have been examined without, however, finding common ground. Last May, at the height of the tension with Camfin, Sinochem's representatives had revealed that they had submitted a proposal to the Golden Power Offices, a proposal not shared with Pirelli. The document presented by the Chinese to Palazzo Chigi envisaged precisely the establishment of a trust or similar instruments, but 'in time': a sort of self-freezing of voting rights for three years, after which the Sinochem shareholder would return to full ownership. Again according to the same sources, this solution would in turn have been the subject of consultation with the US administration to see whether the time freeze might be sufficient to overcome the restrictions of the US regulations on connected vehicles, but the verification would have proved negative. Hence the encore plan, this time presented directly by Sinochem to Pirelli, on the spin-off of smart sensors into a new company, 100% controlled by Pirelli, but with governance that would have obscured the Chinese partner's visibility over the technology. This latter solution was structurally rejected by Camfin because it would destroy value and have a negative impact on Pirelli's integrated business model. The picture is completed by a third proposal that Camfin would have presented to the Chinese partner: the descent of the shareholder Sinochem from 34% to 10% as part of a placement operation with investors already identified. A solution that would have run aground, according to some reconstructions, on the exit price of Sinochem, which was determined to extract a majority premium in the context of a transaction that generally takes place at market prices.