(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 IEP 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.
(Reporting by Gursimran Kaur in Bengaluru; Editing by Dhanya Ann Thoppil)
Source: https://finance.yahoo.com/news/carl-icahn-unties-personal-loans-061345548.html