RCS MEDIAGROUP SPA 
By Capital injection proposal and other
Articles of Association amendments approved by a wide majority
2012 Financial Statements approved
Reduction in the number of Directors from twelve to nine, with confirmation of independent Director Laura Mengoni
Milan, 30 May 2013 - The Shareholders' Meeting of RCS MediaGroup chaired by Angelo Provasoli met today in
Ordinary and Extraordinary sessions and passed the following resolutions.
In Extraordinary session:
- eliminate the nominal value of common and preferred shares of the Issuer, in accordance with articles 2328 and 2346 of the Italian Civil Code;
- approve, including in accordance with article 2446 of the Italian Civil Code, the economic and financial position at 31 March 2013 of RCS MediaGroup, accompanied by the Directors' Explanatory Notes and remarks of the Board of Statutory Auditors.
- completely cover the losses for the 2012 financial year, totalling EUR 494,725,467.38, the loss reported in the first quarter of 2013, totalling EUR 78,012,416.89 and net merger deficits, totalling EUR 334,577,574.10, and thus a total of EUR 907,325,458.37, resulting from the Company's balance sheet at 31 March 2013 by a reduction of share capital from EUR 762,019,050.00 to EUR 139,250,009.00, with consequent reverse stock split of only common shares in a ratio of 3 new common shares for every 20 ordinary shares; in the same context and simply for the purposes of accounting reconciliation, losses of EUR 415,144.42 will be carried forward and 17 shares held by the company will be cancelled.
- approve that the Company can issue new preferred shares (hereinafter referred to as "Category B Preferred Shares") with the same characteristics as the preferred shares already in circulation (the "Category A Preferred Shares") with the exception of the following:
pre-emption, after what is due to the Category A Shares, in the reimbursement of capital up to an amount per share equal to the average accounting equivalent of the shares of the same category, intended as the time-to-time ratio
existing between the total amount of capital contributions made for subscription of the Category B Shares and total
number of existing Category B Shares ("Accounting Equivalent of Category B Preferred Shares");
preferred dividend, after the 0.05 euro dividend due to the Category A Preferred Shares, up to an amount totalling
5% of the Accounting Equivalent of Category B Shares;
total dividend increased compared to common shares equal to 2% of the Accounting Equivalent of Category B Preferred Shares;
- rights issue, performed separately, for a maximum amount of EUR 500,000,000.00, including any share
premium, of which: a) maximum of EUR 400,000,000.00 through the issue of common shares with the same characteristics as those in circulation and b) maximum of EUR 100,000,000.00 Category B Preferred Shares, all without indication of nominal value and with regular voting rights, to offer as a rights issue, to the Company's common and preferred shareholders, respectively, in accordance with article 2441, first section of the Italian Civil Code, in proportion to the number of shares held by the same and to establish 31 December 2013 as the final deadline for the capital injection and to establish, in accordance with article 2439, second section of the Italian Civil Code;
- grant the Board of Directors the broadest powers to be able to: (a) define, close to the start of the offer, the issue price of the common shares and new Category B Preferred Shares, also taking account of the general market conditions and the trend in prices and the related volumes of both existing common shares and preferred shares seen on the stock market, as well as the income, equity and financial performance of the Company and/or the Group and the related outlook for development, and considering market practices for similar operations. Subject to the criteria above, the issue price will be determined by applying, according to market practices for similar operations, a discount on the theoretical ex rights price (TERP) of existing common and preferred shares, calculated based on current methods; (b) determine - consequent to sub (a) - the maximum number of newly issued common shares and Category B Preferred Shares as well as the ratio to assign as an option, rounding the number of shares up or down as needed; (c) set the timing for the execution of the rights issue resolution, and specifically for the start of the option offer, as well as for the subsequent offer of any unexercised rights on the stock market at the end of the subscription period, in compliance with the final deadline of 31 December 2013;
- attribute to the Board of Directors, in accordance with article 2443 of the Italian Civil Code, the option of a rights issue, which may be performed separately, by 31 December 2015 for an additional maximum total amount of EUR 200,000,000.00, including any share premium, and up to a maximum total amount of EUR 600,000,000.00, net of the amount actually subscribed at the outcome of the capital injection in accordance with article 2441, first section of the Italian Civil Code approved on today's date, through the issue of common shares and preferred shares to offer as a rights issue to entitled parties, in proportion to their number of shares;
- amend article 5 (specifically regarding the possibility of exclusion of the option right for capital injections limited to 10% of share capital at the conditions required by law), article 8 (convocation, participation and representation) and article 19 (granting of powers) of the Articles of Association.
***
In ordinary session: - approval of the Financial Statements at 31 December 2012;
- favourable vote expressed on section I of the Remuneration Report prepared by the Board of Directors in accordance with Article 123-ter of Italian Legislative Decree no. 58/1998 and relative implementation provisions issued by Consob;
- nomination of Laura Mengoni, already co-opted in the 12 February 2013 Board of Directors' meeting, as Company director. Laura Mengoni has declared that there are no causes for her ineligibility and incompatibility and that she possesses the requisites required by law and the articles of association for taking the office and possesses the independence requirements for her office including as per article 148 of the Consolidated Law on Finance (TUF). A summary of her curriculum vitae is available on the Company's website www.rcsmediagroup.it(Corporate Governance/Board and Committees Section). As of the date of her nomination, Laura Mengoni did not possess any RCS MediaGroup S.p.A. shares;
- reduction of the number of directors to nine members.
2
***
The Board of Directors' meeting held on today's date, subject to confirmation of the assessment of the independent requisites regarding Laura Mengoni as per the Self-Governance Code adopted by the Company, reinstated the Audit and Risk Committee and the Compensation and Appointments Committee, which are composed as follows:
Audit and Risk Committee: Luca Garavoglia, Fulvio Conti, Piergaetano Marchetti and Laura Mengoni.
Compensation and Appointments Committee: Roland Berger, Laura Mengoni and Carlo Pesenti.
***
Based on a request from Consob, submitted in accordance with article 114, section 5, of Italian Legislative Decree
58/1998, during the Extraordinary Shareholders' Meeting, the Chief Executive Officer provided the following
information.
In the event that the Extraordinary Shareholders' Meeting fails to approve the capital injection, the agreement with the banks for refinancing the expiring debt, totalling EUR 700 million between August and December 2013 and totalling an additional EUR 50 million in March 2014, would not be able to be finalised. Therefore the Company would find itself in a condition of not being able to fully repay these lines, and that would result in the need to immediately review the Development Plan approved by the Board of Directors, since the financial resources of capital and debt to cover the overall requirement of the Plan would not be available.
In this unlikely hypothesis, the Company would quickly have to create an alternative plan, which would have to entail, on one side, the valorisation of other assets for disposal, possibly including assets considered as core and, on the other hand, an urgent modification of the bank debt due dates, for implementation of this alternative plan.
Despite a positive shareholders' equity remaining after covering the losses at 31 March 2013, there is no doubt that the company requires an increase in equity to perform its activities. If the capital injection is not approved by the Shareholders' Assembly today, the Board would have to evaluate the timing and contents of a new capital injection proposal to resubmit to the shareholders and at the same time for refinancing the debt to negotiate with the lender banks.
And with the understanding that, if required, the Company would have to adopt restructuring procedures for its debt.
The revision of the loan terms and conditions positively affects the expected net result, reducing the amount of financial expenses to sustain over the plan, while it has no effect on expected operating income. Thus the targets announced to the market in terms of net financial position on EBITDA are confirmed.
3
(b) in the event that as of the date of the shareholders' meeting negotiations with the banks have not been finalised, indicate their status and the timing expected for their finalisation, as well as an estimate of the effects on the quantities indicated in the previous point;Refer to: (i) the release issued to the public on 29 May 2013; (ii) the Supplement of 29 May 2013 to the Informational Document related to the medium-long term syndicated loan published on 22 April 2013; (iii) the Supplement of 29 May 2013 to the Informational Document related to the preliminary guarantee agreement, published on 6 May 2013. These documents and supplements are available to the public on the Company's website www.rcsmediagroup.it(Corporate Governance/Info Documents section).
(c) for each of the Business Units in the Plan, indication of any deviations (i) of the final figures at the most recent date available in relation to the 2013 budget; (ii) growth rates used to prepare the budget with those recorded based in final figures;
The performance of the individual Business Units in terms of the final EBITDA for the month of March is basically aligned, on the whole, with the budget forecasts for the same period. Specifically, only the Italian Newspapers Business Unit recorded a negative deviation of EUR 1 million compared to the EBITDA forecast of the first quarter, while the other Business Units are in line (Advertising) or with a slight improvement compared to the budget: the Magazines Business Unit recorded a positive deviation of EUR
0.4 million, the Books Business Unit EUR 0.2 million and the Spanish Magazines Business Unit EUR 0.1 million. These results confirm that the performance of advertising markets, highly negative in the first
quarter of 2013 both in Italy and Spain, was correctly forecast by the Company, at least in terms of the first
months of 2013, for the Plan.
No forecasts have been made by the market research company for the 2013-15 three year period and, for that reason, the independent expert who evaluated the Plan engaged by the Board of Directors did not express evaluations on future trends given this market's uncertainty in the current macroeconomic crisis situation.
Therefore, at the time the Plan was prepared, the Company based its hypotheses on macroeconomic trend forecasts provided by leading international institutions, which forecast an additional drop in the Italian GDP of 1.0% in 2013 (against a growth of 0.5% for the Euro zone), with a recovery in 2014 and 2015, years for which a growth of 0.5% and 1.2% respectively is forecast and consequent realignment with the euro zone (+1.5% in 2014 and +1.9% in 2015).
In terms of Spain, the drop in GDP in 2013 is forecast to be around 1.5%, with a recovery in subsequent years where a growth is predicted of 0.8% in 2014 and 1.6% in 2015.
In terms of the performance and evolution of the advertising markets for the 2013-2015 three year period, there are no official and independent forecast figures which cover the performance of the plan years, particularly in a market context which continues to be characterised by a high degree of uncertainty. However, it has been forecast that the advertising market will return to grown in 2014. Internet will remain the medium with the fastest growth, with television remaining the main advertising medium for the next two years. The decrease in press results will continue, especially newspapers.
Forecasts for the plan period report a market drop for traditional business (newspapers and magazines) with a 2012-2015 compound annual growth rate (CAGR) of -7.6% while online businesses should grow, with an approximate increase of 11% in CAGR for the same period.
4
Like Italy, the Spanish market is only expected to recover starting in 2014 with traditional business (newspapers and magazines) which should post a negative 3.8% CAGR in the 2012-2015 period and a continuous growth in online businesses with a positive CAGR of 5.8% for the 2012-2015 three year period.
In terms of the Spanish Newspapers Business Unit a greater drop is expected compared to the traditional business market (CAGR -5.4%) and a better performance for digital business thanks to initiatives undertaken for transition to digital reading platforms (CAGR 2012-2015 +6.7%).
Based on the trend of the first months of 2013 and the positive effect of renegotiating the expiring debt, currently there is no indication of an increase in the execution risk for the Development Plan, which nonetheless remains subject to risks, in particular linked to the overall macroeconomic trend (the most recent macroeconomic forecasts have expressed a worsening of the forecasts in GDP trends in Italy) and the publishing market in the two reference countries for RCS, Italy and Spain, as well as possible delays compared to forecast revenue from innovative projects in the digital field, linked to the entrance in segments with a different degree of competition.
(iii) with regard to the current refinancing transaction of the expiring bank loan: (a) description of the existing bank debt conditions in terms of interest rates, collateral, liens, covenants, etc.;
The Group's bank debt at the date of 30 April 2013 totals EUR 860 million, gross of EUR 30 million of
available funds. This bank debt, which does not include operating and finance leases, is represented by:
- so-called Committed lines of credit used for EUR 750 million with a 60 bps spread on the Euribor reference rate, without guarantees, liens or covenants;
- other medium term lines of credit of the subsidiary Dada for EUR 23 million with spread of around 410 bps on the Euribor reference rate, with covenant on the subsidiary of NFP/EBITDA not greater than 4
times and EBITDA/Financial Expense less than 2.5 times, fully complied with
- a real estate loan for EUR 6 million, with mortgage, at a fixed rate of 1%
- short term revocable lines in the form of current account overdraft, short term advances and subject to collection, for a total of EUR 81 million, with variable spreads on the Euribor reference rate based on
the market, at present equal to around 250-300 bps without guarantees, liens or covenants
Refer to: (i) the release issued to the public on 29 May 2013; (ii) the Supplement of 29 May 2013 to the Informational Document related to the medium-long term syndicated loan published on 22 April 2013; (iii) the Supplement of 29 May 2013 to the Informational Document related to the preliminary guarantee agreement, published on 6 May 2013. These documents and supplements are available to the public on the Company's website www.rcsmediagroup.it(Corporate Governance/Info Documents section).
(c) indication of the banks involved and their corresponding share in the refinancing transaction;The table below shows the indication of the banks involved and their corresponding share in the refinancing transaction:
5
EUR | Total Loan | % |
Intesa Sanpaolo S.p.A. | 230,000,000 | 38.33% |
UBI Banca soc.coop. per az. | 153,000,000 | 25.50% |
UNICREDIT S.p.A. | 77,000,000 | 12.83% |
BNP PARIBAS Italian Branch, including through its subsidiaries and/or associates | 57,500,000 | 9.58% |
Banca Popolare di Milano s.c. a r.l. | 57,500,000 | 9.58% |
MEDIOBANCA - Banca di Credito Finanziario S.p.A. | 25,000,000 | 4.17% |
Total | 600,000,000 | 100.00% |
The new terms and conditions for the loan state that only EUR 150 million from the capital injection income will be used to repay the expiring lines of credit, while the remaining amount will be used to support the Development Plan projects and ensure the necessary financial flexibility for optimal management of the lines of credit.
(v) the effects resulting from the bank debt renegotiation underway on the preliminary guarantee agreement required for the capital injection, providing any updated elements compared to what this company has already announcedThe Guarantor Banks have aligned the conditions for effectiveness of the preliminary guarantee agreement, signed last 29 and 30 April, to the reduction from EUR 400 to 380 million of the minimum amount of capital injection, based on the total amount of shareholder and guarantor undertakings, with the total amount of the preliminary guarantee remaining EUR 182.5 million.
***
The minutes of the Shareholders' Meeting will be made available to the public, within thirty days from today's date, at the company's registered office, Borsa Italiana S.p.A. and on the Company's website www.rcsmediagroup.it(section: Corporate Governance/Shareholders' Meeting/2013). A brief report of the shareholders' meeting votes will be made available on the same website in the aforesaid section, within five days of today's date in accordance with current laws.
***
NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA AND JAPAN This communication does not constitute an offer or an invitation to subscribe for or purchase any securities. The securities referred to herein have not been registered and will not be registered in the United States under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicita tion would require the approval of local authorities or otherwise be unlawful. The securities may not be offered or sold in the United States or to U.S. persons unless such securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. Copies of this announcement are not being made and may not be distributed or sent into the United States, Canada, Australia or Japan.
For additional information:
RCS MediaGroup - Media RelationsMaria Verdiana Tardi - 02 2584 5412 - 347 7017627 - verdiana.tardi@rcs.it
RCS MediaGroup - Investor RelationsSelene Litta Modignani - 02 2584 3390 - 366 5836973 - selene.littamodignani@rcs.it
www.rcsmediagroup.it
6
|
distributed by
|
