MILAN—Pirelli has deconsolidated its operations in Venezuela because of a deterioration of the macro-economic context, growing restrictions on the conversion of foreign currencies and the reduced availability of U.S. dollars.
“In line with other multi-nationals, Pirelli therefore proceeded, with reference date 31 Dec 2015, to the accounting deconsolidation of Pirelli de Venezuela CA, the value of the stake being booked at fair value” at about $20.9 million, the Italian tire-maker said on March 15.
The announcement accompanied Pirelli's full-year 2015 results: showing that the deconsolidation had about a $619.8 million negative impact on its accounts.
Of that amount, the company said about $307.7 million was related to the Venezuelan company's positive net financial position.
Pirelli said that the Venezuelan operation would no longer be included in its results, “and therefore will no longer bear the impact of the recurring devaluations which we have seen in recent years, both at the level of results and the net financial position.”