Icahn Enterprises L.P.’s stock jumped 5.7% in premarket trade Monday, after The Wall Street Journal reported that Carl Icahn and banks finalized amended loan agreements Sunday that untie his personal loans from the trading price of his company’s shares.
The report from Nate Anderson’s Hindenburg Research also revealed that Icahn had borrowed against shares, or units, he owns in IEP. For more, see: Icahn calls Hindenburg short-seller report self-serving, as market value of his company’s stock plunges by $4 billion About 60% of Icahn’s IEP shares were pledged as collateral for the personal loans, which led his lenders to privately call on him to pledge more collateral as the stock price fell. IEP’s stock is down 43% in the year to date and closed Friday at $28.86. Before the short-seller report, it was trading above $50.Icahn is now putting up about $6 billion in collateral, including $2 billion of his personal funds, and about 320 million IEP shares, said the Journal.
Icahn has further agreed to a repayment plan, under which he will pay the banks $500 million in September, make eight quarterly payments of $87.5 million starting a year after that and the remaining $2.5 billion balance three years from now.
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