Italian tyre and industrial group Pirelli has confirmed its plans to focus on its core business and proceed with a spin-off of the real estate arm by the end of the year.
Italian tyre and industrial group Pirelli has confirmed its plans to focus on its core business and proceed with a spin-off of the real estate arm by the end of the year.
'We are more than confident that we will be able to finalise the real estate spin-off by the end of 2010,' president Marco Tronchetti Provera said in a conference call on the presentation of the 2009 annual results.
According to Provera, there are no obstables to the completion of the operation but only technical issues which will take a couple of months to resolve. 'I want to highlight once again the fantastic work done by the real estate subsidiary,' he continued. 'We want to focus on the tyre business but Pirelli Real Estate has been undervalued and the outlook for 2010 is to obtain positive earnings before interest and taxes. It is a real possibility.'
The operation will allow both companies to maximise their value, Provera said, with the tyre business eliminating the discount to net asset value and the real estate unit being able 'to stand on its own feet'.
Last week Pirelli RE reported net losses narrowed to EUR 104.3 mln over 2009 from EUR 195 mln in 2008 after accounting for restructuring costs of EUR 55.3 mln and net property writedowns of EUR 31.4 mln. Pirelli RE reported an EBIT loss of EUR 26 mln in 2009.
