Camfin, Chinese partner seek to strengthen Pirelli stake

Milan – Pirelli shareholder Camfin SpA is reviewing partnership with Chinese rubber magnate Niu Yshun to increase its stake in the Italian tire maker’s shares.

In a statement 1 April, Camfin said it had signed a preliminary and non-binding memorandum of understanding with Niu-owned financial vehicle Longmarch sarl to develop private equity initiatives.

The proposed partnership will create a joint venture, led by Camfin, to which Logmarch will transfer its 5.2% long position in Pirelli. Camfin in turn would contribute call options it holds on 4.89% of Pirelli’s share capital.

In addition to the proposed financial instrument, Camfin also owns a 10.1% share in Pirelli.

Longmarch is headed by the Chinese Niu family, with which Pirelli has had “industrial relationships” since the opening of its first plant in China in 2005.

The MoU was signed a day after Italian high-performance braking systems producer Brembo SpA announced it had acquired a minority share in Pirelli.

The 'autonomous' decision to acquire a 2.34% stake in Pirelli was part of a “non-speculative, long-term approach,” Bergamo-based Brembo announced 31 March.

In response to the new investments, Camfin chairman and CEO, Marco Tronchetti Provera said the moves "confirms the quality of the work done in these years."

The course of the Pirelli's business will continue "unchanged,” said Tronchetti, who also serves as Pirelli executive vice chairman and CEO.