14MB - Pirelli

NON-PERFORMING LOANS
Collections on non-performing loans are Euros 514.2 million in
2008 compared to Euros 541 million in the prior year.
Operating profit (loss) (EBIT) including earnings (losses)
from investments in 2008 is a profit of Euros 10.1 million compared
to a profit of Euros 23.4 million in 2007.
The reduction of -Euros 13.3 million is due to the negative change
of Euros 4.9 million from management activities and the negative
difference of Euros 8.4 million from capital activities.
Outlook for the current year
In 2009, a further improvement in revenues from rents and asset
sales is forecast for about Euros 1 billion; Pirelli RE will benefit
for its share of that amount.
The company will focus on a turnaround for 2009, unless other
adverse changes occur in the reference market. The target is an
operating profit (EBIT), including earnings (losses) from investments
which is in line with the Three-year Plan thanks to actions
taken to reduce costs, the sale of part of the non-performing loan
portfolios and the start of a strategic partnership for the SGR.
Proposed share capital increase
On March 5, 2009, the board of directors confirmed the resolutions
passed in February and approved the operation to strengthen
the equity structure of Pirelli Real Estate and to sustain the
new business model by proposing a share capital increase against
payment, divisible, to be offered as option rights to the shareholders
for a maximum amount of Euros 400 million.
It is probable that the share capital increase will be completed by
the end of the first half of the current year, under the assumption
that it will be approved by the special session of the shareholders’
meeting, called at the same time as the ordinary session of
the shareholders’ meeting that among other things will resolve
on the approval of the financial statements for the year ended December
31, 2008, and that the necessary authorizations will also
be obtained from the relevant authorities.
On February 10, 2009 the Parent, Pirelli & C. S.p.A., gave its full
support to the capital increase and made a commitment to subscribe
to its share and stated that it will subscribe to any unsubscribed
shares that remain at the end of the offer period. Pirelli &
C. S.p.A. will fulfill its obligation by converting to equity a part of
the financial receivable due from Pirelli Real Estate.
ANNUAL FINANCIAL REPORT 2008
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