Carl Icahn unties personal loans from IEP’s share price – WSJ
2023.07.10 03:37
© Reuters. Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network’s Neil Cavuto show in New York, U.S. on February 11, 2014. REUTERS/Brendan McDermid/File Photo
(Reuters) – Carl Icahn and banks have finalized amended loan agreements that untie Icahn’s personal loans from the trading price of Icahn Enterprises , months after short-seller Hindenburg flagged margin call risks, the Wall Street Journal reported on Monday.
Among other concerns, Hindenburg had in May called Icahn’s pledge of about 60% of his stake as collateral for margin loans a risky form of financing that could result in margin calls should unit prices decline.
Icahn has now agreed to provide additional collateral, which will total roughly $6 billion including $2 billion of his funds and laid out a plan to repay the loans in three years, the report said, citing people familiar with the matter.
The billionaire will pay banks $500 million in September, make eight quarterly payments of $87.5 million beginning a year after that, and then pay the balance $2.5 billion three years from now, the Journal added.
Shares of IEP are down more than 40% since Hindenburg disclosed its short position.
Hindenburg accused IEP of overvaluing its holdings and relying on a “ponzi-like economic structure” to pay dividends and said that IEP units were inflated by more than 75%.
IEP did not immediately respond to a Reuters request for comment.
