Pirelli’s Chinese shareholder Sinochem has put forward a “structured solution” to end a governance spat with the tyremaker’s Italian investor Camfin. This, according to Reuters.
The announcement was made as the government assesses options to limit Sinochem’s (600500.SS), opens new tabinfluence over Pirelli (PIRC.MI), opens new tab, or even turn it into a passive shareholder, in a bid to facilitate the tyremaker’s U.S. expansion.
Beijing-controlled Sinochem is Pirelli’s largest shareholder with a 34.1% stake while Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, holds a 25.3% stake, with plans to increase it to up to 29.9%.
Sinochem said in a statement on Monday it had submitted a “structured, well-founded proposal based on standard and widely used corporate tools in line with best international practice, with the objective of addressing both Pirelli’s governance framework and the concerns relating to U.S. regulatory requirements if any.”
Camfin and Pirelli itself complain that having a Chinese company as its main shareholder poses a hurdle to the group’s U.S. expansion, as Washington tightens restrictions on Chinese technology in the automotive sector.
The Chinese investor said it hoped its proposal would be “neutrally assessed with genuine cooperative spirit by other involved parties,” without providing details of its solution.
A person close to the matter said the solution entailed spinning off some Pirelli assets into a separate corporate entity to distance those activities from the company’s Chinese investor.
In response to Sinochem’s statement, Camfin, however, said the proposed solution would harm Pirelli’s business model and technological development and still not help the company comply with U.S. regulation on connected vehicles.
Camfin said it had put forward its own proposal and remained open to discussing a solution.
Last week, Camfin said it would not renew its shareholder pact with Sinochem, paving the way for a new intervention by the Italian government on the tyremaker’s governance through “golden power” legislation aimed at preserving the national interest in business matters.
