Pirelli will gain a controlling share of the Kirov and Voronezh tire factories in Russia by increasing its stake in the joint venture it operates with Russian corporation Rostec and financial group GHP. The tiremaker will repurchase from GHP 15% of shares from the package that used to belong to Fleming Family & Partners, thus increasing its share to 65%.

Pirelli’s first-half results, published on Aug. 5, show the tiremaker exercised its earn-in option to enlarge its shareholding in OOO Pirelli Tyre Russia. As a result, GHP’s stake will go down from current 25% minus one share to approximately 10%. Rostec says it share will stay the same “for a while” at 25% plus one share.

Pirelli Tyre Russia’s Kirov and Voronezh plants are assets from bankrupt holding company Amtel, which were managed by Sibur before their sale in late 2011 and early 2012. Sibur sold these assets to the Russian-Italian joint venture for 222 million euros, and based on these figures, Pirelli must pay GHP 33.3 million euros for the 15% share package. The joint venture partners also need to invest – in proportion to their respective shareholdings – a further 200 million euros in order to upgrade the plants and improve capacities. Pirelli will be required to reimburse GHP all costs that this financial group has already incurred in connection with this. By 2014, total production capacity of Pirelli Tyre Russia should be 11 million tires per annum.

According to Pirelli’s first-half report, its revenue from the operation between Jan. 1 and June 30 came to 135.5 million euros, 8% more than in the first half of 2012 and a figure that accounts for 4% of the company’s global turnover. (Tyre & Accessories)