Bondi issues bond issue assurances at Olivetti

New CEO offers calming words to shareholders...

Olivetti and Telecom Italia's newly appointed CEO Enrico Bondi attempted to calm shareholders by informing them no concrete decision has yet been made about a possible rights issue. His statement followed a sharp fall in both Olivetti and Pirelli shares after Olivetti announced on Tuesday it will ask permission from shareholders to issue up to seven billion shares and E10bn (£6.1bn) worth of bonds over the next five years. The reason for Tuesday's announcement is because Olivetti, the holding company of Telecom Italia, without the approval of shareholders, can only issue 1.2 billion shares and E2.5bn (£1.5bn) in bonds. Bondi also said in his statement that Tuesday's announcement was only meant to be a procedural formality, which companies carry out before looking to gather further financing. Olivetti shares dropped 13 per cent to E1.28 (78p) and Pirelli nearly eight per cent to E1.88 (£1.14) following shareholders' concerns that Pirelli, which took control of Olivetti in July will look to take on Olivetti's E17bn (£10.4bn) debt. However, all Pirelli's plans for Telecom Italia and Olivetti must wait until the July acquisition is officially approved by the EC and the rubber stamp is not expected until 17 September.