Pirelli to own 29 percent of Prelios after bond conversion

MILAN Wed Apr 9, 2014 3:25pm EDT

The Pirelli logo is pictured at their headquarters in Milan March 18, 2014. REUTERS/Alessandro Garofalo

The Pirelli logo is pictured at their headquarters in Milan March 18, 2014.

Credit: Reuters/Alessandro Garofalo

MILAN (Reuters) - Pirelli (PECI.MI) said on Wednesday it would increase its stake in Italian real estate company Prelios (PCRE.MI) following the conversion of a bond underwritten by the tire maker.

Earlier in the day Prelios said it posted a 2013 loss of 333 million euros, more than one third of its capital.

This will trigger an automatic conversion of a 234 million euro ($324 million) bond issued last year in the framework of a debt restructuring for the real estate group.

Pirelli's stake in Prelios will grow to 29 percent from a current 13 percent, the company said in a statement.

The company said, however, it would seize any opportunity to sell its shareholding in the real estate group, as its strategic focus remained on tires.

Pirelli has underwritten the largest part of the bond, with Italian lenders UniCredit (CRDI.MI), Intesa Sanpaolo (ISP.MI), Banca Popolare di Milano (PMII.MI) and Banca Monte dei Paschi (BMPS.MI) among the other bondholders, Prelios said in a separate statement.

($1 = 0.7234 Euros)

(Reporting by Francesca Landini, editing by David Evans)

FILED UNDER: