Carl Icahn unties personal loans from IEP’s share price

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<span>© 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</span><br />
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<p>(Reuters) – Carl Icahn and banks have finalized amended loan agreements that untie Icahn’s personal loans from the trading price of <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Icahn Enterprises </span></span> , months after short-seller Hindenburg flagged margin call risks, the Wall Street Journal reported on Monday.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>Shares of IEP are down more than 40% since Hindenburg disclosed its short position.</p>
<p>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%.</p>
<p>IEP did not immediately respond to a Reuters request for comment.</p>
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