Tiscali 2007 Annual Report Download - page 49

Events subsequent to the end of the half year
period, Business outlook and prospects
Execution of share capital increase under option
On 10 January 2008, Tiscali S.p.A.’s Board of Directors approved
the issue conditions for the shares offered under option to the
shareholders. The share capital increase resolved by the Board
of Directors as a result of the authority granted them, in accor-
dance with Article 2443 of the Italian Civil Code, by the extraor-
dinary shareholders’ meeting held on 31 August 2007, envis-
aged the issue of 149,792,880 ordinary shares with a par value
of EUR 0.50 each with regular dividend rights, to be offered
under option to the shareholders, at a ratio of 6 new ordinary
shares for every 17 shares held, at a price of EUR 1.00 each,
for a total equivalent value of Euro 149,792,880. The purchase
options could be exercised between 14 January 2008 and 1
February 2008 inclusive and can be traded on the Stock
Exchange between 14 January 2008 and 25 January 2008
inclusive. On conclusion of the option period, the share capi-
tal increase was subscribed for a total of 146,580,966 shares,
equal to 98.75% of the total amount. Subsequently, between
11 and 15 February 2008 an auction took place for the unopt-
ed shares; the market accordingly subscribed 100% of the
amount under offer. Therefore, it was not necessary for Banca
IMI S.p.A. and J.P. Morgan Securities Ltd to provide their col-
lateral guaranteeing the satisfactory outcome of the transac-
tion. The equivalent value of the share capital increase (approx-
imately EUR 150 million) was used to repay the bridging loan
granted by Intesa Sanpaolo and JPMorgan in July 2007.
Assignment and improvement by Standard&Poors’ of Tiscali’s
corporate rating to B+ with a stable outlook
Following the success of the share capital increase, the long-
term corporate credit rating of the Company, assigned by Stan-
dard&Poors’ on 10 January 2008, was raised by S&P to B+
with a stable outlook.
Resignation of Tommaso Pompei and appointment of Mario
Rosso as Chief Executive Officer
Partly as a result of the successful completion of the share
capital increase transaction, during the Board meeting held
on 28/29 February, the Board announced that the strategic
repositioning and equity/financial enhancement phase cover-
ing the last two years had been concluded.
Having reached an agreement with the Company, Tommaso Pom-
pei therefore resigned from his office, while intending to remain
on the Board of Directors until the natural expiry of the entire
Board, and therefore until approval of the 2007 financial state-
ments. The Directors Gabriele Racugno and Rocco Sabelli hand-
ed in their resignation with immediate effect.
Tiscali’s Board of Directors reaffirmed the Company’s desire
to pursue the objectives outlined in the Business Plan and at
the same time to explore the options for further generation of
value for the shareholders in connection with the process for
consolidating the telecommunications sector underway in
Europe.
The Board of Directors therefore appointed the Director Mario
Rosso to manage and coordinate this new strategic phase for
the Company, appointing him Chief Executive Officer.
Mario Rosso, who has gained lengthy managerial experience
with leading industrial groups, has in-depth knowledge of the
Tiscali Group and its potential, having followed the growth over
the last few years first by covering operational and strategic
management roles and, recently, in his capacity as board
director.
Amendments to the stock option plan
On 27 and 28 February 2008, the Board of Directors also resolved
to adjust the exercise price of the options allocated to the employ-
ees by means of the application of a ratio of 0.896756, identical
to that published by Borsa Italiana on 11 January 2008 which
was used to adjust the option and futures contracts on Tiscali
shares consequent to the share capital increase for around Euro
150 million concluded on 22 February 2008. The exercise price
for the options allocated to the employees therefore currently
stands at EUR 2.132 per share.
Furthermore, on the basis of the agreements between the Com-
pany and Tommaso Pompei consequent to the latter’s remission
from his powers during the Board Meeting held on 27 and 28
February 2008, the options assigned to Tommaso Pompei are
understood to be exercisable for the full amount resolved (includ-
ing the second tranche) according to the terms envisaged by the
regulations.
As a result of the adjustment mechanism indicated above, the
exercise price for the options allocated to Tommaso Pompei cur-
rently standards at EUR 2.477 per share.
Business outlook and prospects
The guidelines of the 2008-2012 Business Plan approved by Tis-
cali’s Board of Directors on 26 November 2007, envisage the
strengthening of the Group’s positioning on the two reference
markets (Italy and the UK) concentrating, in particular during
2008, on a rapid integration of Pipex in the UK and on a strong
commercial boost in Italy. Our position will be maintained on the
high-capacity and competitively priced Dual Play (voice and data)
option, with an offer progressively extended to include IPTV serv-
ices (already active in the UK and currently being launched in
Italy) and the integration with mobile services (by means of agree-
ments for the offer of MVNO services).
The Business Plan also foresees that the Group will (i) position
itself on the SME market – in particular in the UK and drawing
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