5. Shares that entitle the holder to special rights and special powers
Shares entitling the holder to special rights
No shares that entitle the holder to special rights are issued.
Several European Union member states, including Italy, have introduced certain special powers that the government can exercise with regard to the operations and ownership structures of companies operating in sectors considered to be strategic and of national interest. These powers generally take the form of the government’s right to control certain changes in the ownership structure of companies subject to such provisions and/or a right to veto certain strategic decisions.
Following surveys conducted by EU bodies on Italian regulations on special government powers3 the so-called “golden share” regulations), and after several regulatory changes4, the Italian government issued Decree Law No. 21 of 15 March 2012 (converted, with amendments, by Law No. 56 of 11 May 2012), which governs “special powers over ownership structures of companies in the defence and national security sectors, as well as for assets of strategic importance in the energy, transport and communication sectors”. The new legislation provides for distinct regulations governing the defence and national security sectors, on the one hand, and “strategic assets in the energy, transport and communication sectors” on the other.
Reference regulatory framework for Snam
As far as Snam is concerned, Article 2 of Decree Law No. 21 of 15 March 2012 stipulated that one or more regulations, adopted by a Presidential Decree, would identify the networks, plants, assets and partnerships of strategic importance to the national interest in the energy, transport and communication sectors (“Significant Assets”).
It is therefore provided that any resolution, act or transaction adopted by a company that holds one or more Significant Assets and results in changes in the ownership, control or availability of said Significant Assets, or a change in their purpose, must be reported by the Company to the prime minister within 10 days and, in any case, before it is implemented. Resolutions passed by the Shareholders’ Meeting or the company boards concerning the transfer of subsidiaries that hold the aforementioned Significant Assets must be reported within the same timeframe.
Within 15 days of the notification, the prime minister may, by issuing a decree adopted pursuant to a resolution of the Council of Ministers: (i) declare a veto; (ii) impose specific provisions or conditions, if this is sufficient to ensure the protection of the public interest. If 15 days have passed since the notification and the prime minister has not adopted any measures, the operation may be carried out.
It is also provided that the acquisition, for any reason, by a non-EU party of shareholdings in companies that hold Significant Assets must be reported to the prime minister within 10 days. If the acquisition constitutes a serious threat to the essential interests of the state, the prime minister may, by means of a decree adopted pursuant to a resolution of the Council of Ministers, within 15 days of the notification: (i) make the effectiveness of the acquisition conditional upon the assumption by the buyer of commitments aimed at ensuring the protection of the aforementioned interests; (ii) block the acquisition, in exceptional cases in which there is a risk to the protection of the interests in question that cannot be eliminated through the assumption of specific commitments. Once again in this case, if 15 days have passed since the notification and the prime minister has not adopted any measures, the acquisition may be carried out.
The law also provides that such powers may be exercised “exclusively on the basis of objective and non-discriminatory criteria”.
The aforementioned regulation, based on Article 3 of Decree Law 21/2012, repealed the regulation on the “golden share”5 as of the entry into force of the aforementioned decrees and regulations aimed at identifying networks and plants of strategic importance to the national interest in the energy, transport and communication sectors.
As at the approval date of the Report, the “regulation on identifying assets of strategic importance and key strategic assets in the defence and national security sectors” had been adopted through Prime Ministerial Decree No. 253 of 30 November 2012, and, by means of Prime Ministerial Decree No. 129 of 2 October 2013, Article 2-bis, relating to “assets of strategic importance in the communication sector” had been inserted into said regulation, while the procedure for adopting a regulation for the energy sector had not yet been completed.
Special powers and scope of application for Snam
Until it was repealed by resolution of the Shareholders’ Meeting of 27 April 20106, the Bylaws contained a specific provision that gave Snam’s Board of Directors the power to approve the exercise of voting rights associated with shares (exceeding a given percentage of the share capital) acquired by parties related to the state or to government authorities, as well as parties that carried out natural gas import and/or export activities in Italy.
Conversely, the Prime Ministerial Decree of 23 March 2006 identified Snam, “pursuant to and for the purposes of Article 2, paragraph 1 of Decree Law 332/1994, as a company whose bylaws, prior to any act that results in the loss of control of the company by the state, must incorporate a clause giving the Ministry of Economy and Finance one or more of the powers set forth in letters a), b), c) and d) of Article 2 of Decree Law No. 332/1994, to be exercised in agreement with the Ministry of Productive Activities”.
Based on this regulation, the Ministry of Economy and Finance, in agreement with the Ministry of Economic Development, holds special powers, to be exercised in accordance with the criteria set out by the Prime Ministerial Decree of 10 June 20047. In short, these special powers concern the ability to:
- block parties subject to the limit on shareholdings, pursuant to Article 3 of Decree Law 332/1994, from acquiring significant shareholdings, i.e. at least one twentieth of the ordinary voting capital. This block may be exercised if the transaction is considered to be damaging to the vital interests of the state;
- block the conclusion of pacts or agreements pursuant to Article 122 of the TUF (shareholder pacts), if such pacts would represent at least one twentieth of the ordinary voting capital. Once again, such opposition must be duly founded in relation to specific harm posed by the aforementioned agreements to the vital interests of the state;
- veto the adoption of resolutions of particular importance to the Company (i.e. resolutions concerning a wind-up, transfer, merger, demerger, transfer of the registered office abroad, change to the corporate purpose, or amendment of the Bylaws that would cancel or amend the content of the “special powers”), again in relation to specific harm posed to the vital interests of the state;
- appoint a director without voting rights.
The text of Decree Law 332/1994 contains the terms and procedures concerning the exercise of the power of opposition and veto, as well as the suspension, pending the entry into force of the terms for opposition, of voting rights and, in any case, of rights other than dividend rights related to shares representing a significant shareholding.
The provisions described above, which shall remain in force until the aforementioned regulation is issued, do not currently apply to Snam.
3 Decree Law No. 332 of 31 May 1994, converted, with amendments, by Law No. 474 of 30 July 1994.
4 Prime Ministerial Decree of 10 June 2004; Prime Ministerial Decree of 20 May 2010
5 Decree Law No. 332 of 31 May, 1994, converted, with amendments, by Law No. 474 of 30 July 1994
6 Pursuant to an express provision of the Bylaws, this article ceased to be effective on 30 September 2009 (i.e. at the end of the natural gas transportation and dispatching regulatory period immediately after the period that ended on 30 September 2005).
7 The Prime Ministerial Decree of 20 May 2010 repealed Article 1, paragraph 2 of the Prime Ministerial Decree of 10 June 2004. Article 1, paragraph 1 is still in force, and states that the special powers in question may be exercised “exclusively where there are significant and fundamental reasons of general interest, particularly with regard to public order, public security, public health and defence, in a form and scope suitable and proportionate to the protection of said interests, including through the stipulation of appropriate time limits, without prejudice to compliance with the principles of domestic and EU laws, primarily the principle of non-discrimination”.