Tiscali 2013 Annual Report Download - page 184

achievement of the growth objectives established in a market context characterised by heavy
competitive pressure.
In this context, the Directors reveal that, during 2013, an advisor was appointed to support the
Tiscali Group with the restructuring of its financial debt. After a structured and intense phase of
negotiation with the financing institutions, on 6 June 2014 the advisor sent the financing
institutions a last draft of a term sheet (“Term Sheet”) which contains a proposal as things stand
not binding, which on the one hand could give rise to a recapitalisation of the Group and on the
other will lead to a partial rescheduling of the debt and the re-wording of the financial covenants of
the GFA in line with the Group performances envisaged in the Plan. The restructuring proposal
contained in this Term Sheet was accepted, albeit in a non-binding manner, by all the financing
institutions as per the GFA and, according to the Directors, will permit the Group to pursue a
consensual hypothesis of restructuring its financial debt.
On 13 June 2014, Tiscali S.p.A.’s Board of Directors approved the Plan which reflects the
restructuring of the debt deriving from the GFA on a consistent basis with the proposal included in
the afore-mentioned Term Sheet. In detail, the Directors disclose that in relation to the projections
of the 2014-2018 cash flows for the Tiscali Group, said Plan hypotheses a further rescheduling of
the part of the financial debt falling due in 2017, for the portion in excess with respect to the net
cash flows generated over the period of the Plan.
The Directors disclose that the finalisation of the GFA restructuring transaction is still subordinate
to the occurrence of certain conditions, including: (i) the waiver by the financing institutions of the
adoption of the contractual remedies envisaged by the GFA in the event of so-called Events of
Default until the signing of all the necessary contractual documentation, (ii) the completion of the
authorisation procedure by the competent decision-making bodies of the financing institutions and
(iii) the definition of the contractual documentation necessary for the implementation of said
transaction under satisfactory terms for all the financing institutions In this situation, the Directors
reasonably believe that the afore-mentioned debt restructuring transaction can be finalised over the
short-term, so as to be able to proceed with the implementation of the Plan and that this will permit
over the long-term the achievement of a balanced equity, financial and economic situation.
In conclusion, the Directors acknowledge that at present uncertainties still remain, relating to
events or circumstances, that may raise considerable doubt on the ability of the Tiscali Group to
continue to operate under the going-concern assumption; however, after making the necessary
checks and after assessing the uncertainties found in light of the factors described, and having
taken into account the afore-mentioned Term Sheet proposal accepted on a non-binding basis by
all the financing institutions, they have the reasonable expectation that the Group has adequate
resources to continue operations in the near future and therefore have adopted the going-concern
assumption when preparing the financial statements;
b. as indicated in the section “Disputes, contingent liabilities and commitments”, in August 2013 a
settlement agreement was signed (the “Settlement Agreement”) concluding the disputes brought by
certain associations and foundations representing the former minority shareholders of the Dutch
subsidiary World Online International NV (“WOL”). The Settlement Agreement does not include
the compensation requests made by 28 shareholders or those entitled who brought legal
proceedings, served on 19 June 2014, vis-à-vis WOL and the financial institutions tasked with the
listing of said WOL. The Directors believe the risk of losing vis-à-vis these shareholders or
assignees is not probable.
5. The drawing up of the report on operations and the report on corporate governance and the ownership
structure in compliance with the matters envisaged by the provisions of the law, is the responsibility of
Tiscali S.p.A.’s Directors. We are responsible for expressing an opinion on the consistency of the report on
operations and the information as per section 1, letters c), d), f), l), m) and section 2, letter b) of Article 123
bis of Italian Legislative Decree No. 58/98, presented in the report on corporate governance and the
ownership structure, with the financial statements, as required by law. For this purpose, we have performed