Tiscali 2009 Annual Report Download - page 26

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This agreement, which subsequently led to the Restructuring Agreement signed by Senior Lenders and the
company (Tiscali S.p.A. and Tiscali UK Holding) on 3 June, envisages:
1) the sale of Tiscali UK Ltd and use of the revenue to repay a portion of the Senior Debt and the debt owed
to Tiscali UK minority shareholders for EUR 200 million and EUR 8 million respectively.
2) the restructuring of the Group’s residual debt to Senior Lenders, after the partial repayment made with
the proceeds from the sale of Tiscali UK as follows:
a) a total of EUR 165 million (which after closing became approximately EUR 158.5 million), according
to new terms, conditions and expiries, in three tranches:
• tranche A: for a maximum amount of EUR 100 million and term of 5 years;
• tranche B: for a maximum amount of EUR 45 million and term of 6 years (which after closing
became EUR 38.5 million);
• tranche C: for a maximum amount of EUR 20 million and term of 7 years, to be repaid with funds
deriving from the release of the escrow account relating to the sale of Tiscali UK, or also through
the increase in share capital described below (see the third share capital increase);
b) a total of EUR 193.5 million – including the associated interest and costs of closing hedge contracts,
of which roughly EUR 147 million relating to tranche D1 and a maximum of approximately EUR
46.5 million relating to tranche D2 through share capital increases in line with the terms described
below under point 3).
3) The execution of increases in share capital, to be offered under option to shareholders, to be used to
repay the residual amount of Senior Debt and debts owed to Andalas, a company owned by shareholder
Renato Soru, and debts owed to Tiscali UK minority shareholders, totalling roughly EUR 31 million and
EUR 11 million respectively. The Framework Agreement envisages the guarantee of subscription of said
increases by the above-mentioned creditors through the off-setting, in whole or in part, of receivables
due to the company, in line with the following:
c) First increase: increase in share capital for a maximum amount of EUR 190 million, with warrants
allocated free of charge. The subscription of said increase, expected to be executed before 31
December 2009, was guaranteed:
• for EUR 32 million by Andalas, a company held by shareholder Renato Soru;
• for EUR 11.7 million by Tiscali UK minority shareholders, whose residual debt, net of the
amount already repaid with the sale of the UK subsidiary, would then be wiped out;
• per la parte restante, fino ad un massimo di 147 milioni di Euro circa, dai Senior Lenders.
At the same time, provision was made for a share capital increase to service the aforementioned warrants
up to a maximum of 5% the share capital post-increase;
The first share capital increase was launched on 12 October and concluded on 11 November 2009 with the
subscription of around 99.9% of all shares offered, as better described in this paragraph.
d) Second increase: increase in share capital for a maximum amount of EUR 46.5 million, following
completion of the first increase and whose amount was to be calculated on the basis of the relative
level of subscription. In particular, for every EUR in cash subscribed by the market in relation to
the First increase, Senior Lenders would write off roughly 32 cents of Senior Debt, up to a maximum
of EUR 46.5 million. In substance, if the market had subscribed EUR 147 million, the Senior
Debt would have been cut by EUR 46.5 million and the second share capital increase would
not have been launched. By contrast, if the market had not subscribed the entire first share capital
increase, the second increase would have been fully launched and offered under option to the
market with the guarantee of subscription from Senior Lenders. Execution of the second increase
was expected by 28 February 2010;
Report on operations