Carl Icahn unties personal loans from IEP’s share price – WSJ

(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 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.