(Reuters) – Carl Icahn and the 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 risks of a call from margin, the Wall Street Journal reported Monday.
Among other concerns, Hindenburg had in May called Icahn’s pledge of about 60% of his IEP stake as collateral for margin loans a risky form of financing that could lead to margin calls if unit prices fall.
Icahn has now agreed to provide additional guarantees, which will total around $6 billion, including $2 billion of his funds, and has outlined a three-year loan repayment plan, the report said, citing people familiar with the matter. .
The billionaire will pay the banks $500 million in September, make eight quarterly payments of $87.5 million starting a year after that, then pay the balance of $2.5 billion in three years, the leader added. Log.
IEP shares 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 IEP units were inflated by more than 75%.
IEP did not immediately respond to a Reuters request for comment.
(Reporting by Gursimran Kaur in Bengaluru; Editing by Dhanya Ann Thoppil)