© 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
(Reuters) -Billionaire activist investor Carl Icahn has amended the terms of his personal loans to separate them from the price of Icahn Enterprises’ depositary units, the investment firm disclosed in a filing on Monday.
The move comes months after short-seller Hindenburg’s criticism triggered a massive fall in the shares of his investment company.
Shares of Icahn Enterprises soared 15.9% at $33.46 in the early hours of trading on Monday.
Icahn and its affiliates have entered into a three-year loan agreement with banks, including Bank of America (NYSE:), N.A., Bank of Montreal and Deutsche Bank AG (NYSE:), which amends and restates previous loan agreements with such lenders and consolidates all of Icahn’s borrowings, the filing said.
In the amended loan agreement, Icahn will provide additional collateral of $2 billion from his personal funds and 320 million IEP shares.
Icahn will repay a principal of $500 million on or before Sept. 1, eight quarterly principal payments of $87.5 million beginning a year after that, and a final principal payment of $2.5 billion at the end of the term.
The only thing that could now trigger a so-called margin call is movement in the net asset value of his company’s investments and not the depositary units’ price.
Hindenburg had called Icahn’s pledge of about 60% of his IEP stake as collateral for margin loans risky, which could result in margin calls should the unit’s prices decline.
The short-seller accused IEP of overvaluing its holdings and relying on a “ponzi-like economic structure” to pay dividends. It also said IEP units were inflated by more than 75%.
Icahn called Hindenburg’s report “self-serving” and vowed to “fight back”.
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