MILAN, Italy (Oct. 28, 2011)—Pirelli & C. S.p.A. will launch a Level 1 American Depositary Receipt program for U.S. investors starting on or about Nov. 2.
Pirelli said offering ADRs will allow it to diversify its shareholder base by attracting a greater number of American investors than present.
ADRs are negotiable certificates issued by a U.S. bank representing a specified number of shares in a foreign stock that is traded on a U.S. exchange, according to the Securities and Exchange Commission. Investors who own ADRs have the right to obtain the foreign stock it represents, but U.S. investors usually find it more convenient to own the ADR.
The price of an ADR corresponds to the price of the foreign stock in its home market, adjusted to the ratio of the ADRs to foreign company shares, the SEC said.
Pirelli has nominated JPMorgan Chase & Co. as the depositary bank to manage the ADRs. Each Pirelli ADR (CUSIP 724256201) will correspond to one Pirelli ordinary share traded on the Milan stock exchange.
Further information will be available at pirelli.com and adr.com when the program becomes operational.