Telecom Italia, the former public Italian telecommunications company, is the world's fifth largest fixed telecommunications operator with 25.4 million subscriber fixed lines installed, and at present it is the sole provider of fixed public voice telephony services in Italy. The privatization procedure of the Company, started in 1995, has been completed on November 4, 1997, after a complex series of political and economical decisions affecting the methods of privatization. As a prerequisite to such dismissal, the Italian Communications Agency has been introduced by Law no. 249 of July 31, 1997, effective August 1, 1997.
The privatization of Telecom Italia has resolved in the biggest European public offering ever realized. In such procedure, Studio Legale Tonucci has acted as Italian legal advisor to the Treasury.
The sale of the shares held by the Italian Treasury has been accomplished by means of a combined public offering and a private sale to a group of stable shareholders. In light of such strategy, the Treasury has entered into separate agreements with 14 stable shareholders, which have agreed not to act in concert and which in the aggregate have acquired approximately 10 % of the shares with the private sale. The sale to the stable shareholders is intended to establish a degree of stability and continuity in the shareholding of the Company following the dismissal by the Treasury. The global offering represented on its part approximately 28.64% of the outstanding shares.
As a result of the procedure, the Treasury will no longer be a significant shareholder of Telecom Italia, but it will continue to be in a position to exercise certain powers within the Company through the exercise of the special powers included in Telecom Italia's By-laws.
Such special powers include :
Approval of material acquisitions of shares. The Treasury has the authority to approve or disapprove the acquisition of material interests in the share capital of TELECOM ITALIA (defined as 3% of the voting share capital).
Approval of material Voting Agreements. approval or disapproval of voting agreements involving a material amount of voting share capital (5% of the voting share capital or any lesser percentage as may be established by decree of the Treasury).
Veto Power. veto power on resolutions to dissolve the company, approve mergers, demergers or disposition of the business, transfer the registered office abroad, change the corporate purposes or amend or modify the Minister of the Treasury's special powers.
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