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Change Report

4. Restrictions on the transfer of shares and voting rights

The Bylaws do not provide for any restrictions on the transfer or ownership of shares. The provisions of law described below impose certain restrictions on the transfer and ownership of shares.

4.1 Unbundling regulations

The Prime Ministerial Decree of 25 May 2012 provided for the creation, by 25 September 2013, of an ownership unbundling system extended to all regulated natural gas transportation, distribution, storage and regasification activities, as well as for the sale by the then controlling shareholder, Eni, of its entire equity investment in Snam, in view of its status as a producer and seller of energy.

In accordance with these provisions, on 15 October 2012, CDP Reti (then a wholly owned subsidiary of CDP) purchased from Eni 30% less one share of the share capital of Snam15. Eni subsequently reduced its equity investment, and currently holds 792,619 Snam ordinary shares, equivalent to around 0.02% of the share capital.

The Prime Ministerial Decree of 25 May 2012 also states that CDP should guarantee the independence of and full separation between Eni and Snam. To that end, Article 2 of the Prime Ministerial Decree of 25 May 2012 stipulates that:

  1. even if Snam is included in CDP’s “separate management” activities, all decisions relating to the management of equity investments in Snam shall be adopted by the Board of Directors of CDP as if the equity investment were part of its “ordinary management” operations, meaning the Ministry of Economy and Finance will have no power to guide such decisions and the members of the Board of Directors of CDP in charge of “separate management” activities will not be able to influence them;
  2. the members of the administration and control bodies and the executives of Eni and its subsidiaries may not be part of the corporate bodies of or hold executive offices at CDP or Snam and their subsidiaries, nor may they enter into any direct or indirect professional or financial relationship with said companies, and vice versa.

Pursuant to the Prime Ministerial Decree of 25 May 2012, the voting rights attached to shares acquired (including through deeds, transactions or agreements of any kind), as well as to shares already held, directly or indirectly, by gas and/or electricity producers or suppliers or by their parents, subsidiaries or associates pursuant to the Italian Civil Code, and any powers of appointment pertaining to them, shall be restricted in compliance with the provisions of Article 19 of Legislative Decree 93/2011. Article 19 of Legislative Decree 93/2011 stipulates that the same party (whether a natural or legal person) may not:

  1. exercise control, directly or indirectly, over an undertaking that produces or supplies natural gas or electricity and at the same time exercise control or rights, directly or indirectly, over a natural gas or electricity transmission system operator or over a natural gas or electricity transmission system;
  2. appoint members of the Watch Structure, the Board of Directors or the bodies that legally represent the Company within a transport system operator or a transport system and, simultaneously, directly or indirectly control or hold rights over natural gas production or supply operations16.

As a result of the legislative changes and the consequent loss of Eni’s control over Snam, on 14 November 2013, following the issuance of the opinion of the European Commission, the AEEGSI adopted Resolution 515/2013/R/gas, implementing its decision to definitively certify Snam Rete Gas as a natural gas transportation system operator under the ownership unbundling regime17.

In accordance with the aforementioned provisions, shareholders that produce and sell gas and/or electricity are forbidden from exercising voting rights at Shareholders’ Meetings, without prejudice to their ownership rights related to the Snam shares they hold.

15 The sale by Eni to CDP RETI of 30% less one share of the voting capital of Snam was also carried out in compliance with Antitrust Authority Resolution C11695 of 8 August 2012 (the “Resolution”). Pursuant to Article 38 of the Resolution, CDP was to ensure that: (i) the Board of Directors of Snam would formalise, in the relevant internal documents of Snam and Italgas, the rule according to which the activities and processes of Italgas relating to the identification of tender processes for the allocation of natural gas distribution service concessions in which to participate and the preparation of the technical and financial bid for participation in the aforementioned tender processes must not be discussed or approved in advance by the Snam Board of Directors; (ii) the Bylaws of Italgas would be amended in order to set the number of members of the Italgas Board of Directors at five (two of whom must not hold the position of Chairman or CEO and must fulfil the independence requirements provided for by the Code of Corporate Governance for Listed Companies); and (iii) the Bylaws of Italgas would be amended in order to stipulate that resolutions to be passed by the Italgas Board (in its configuration of five members) relating to the identification of tender processes for the allocation of natural gas distribution service concessions in which to participate and the preparation of the relative technical and financial bids must be approved only with a favourable vote by four fifths of the directors in office. In accordance with this Resolution:

  • the governance of Snam was amended so that the activities and processes carried out by Subsidiary Italgas in relation to identifying natural gas distribution tenders in which to participate, and in relation to preparing the technical and financial bids for these tenders, are not discussed or subject to prior approval by Snam’s Board of Directors;
  • on 21 June 2013, the Italgas Shareholders’ Meeting amended its Bylaws, stipulating that: (a) the Board of Directors must be composed of five members, two of whom – who must not hold the position of Chairman or CEO and must not have managerial powers – fulfil the independence requirements provided for by the Code of Corporate Governance for Listed Companies; and (b) resolutions on the identification of tender processes for the allocation of natural gas distribution service concessions in which to participate and the preparation of the relative technical and financial bids must be approved with a favourable vote by four fifths of directors in office.

16 Such rights include the power to exercise voting rights and to appoint members of the Watch Structure, Board of Directors or bodies that legally represent the company.

17 In the light of the sale of shares in CDP RETI by CDP, through Resolution 20/2015/R/COM of 29 January 2015, the procedure launched by the AEEGSI and aimed at confirming the continued fulfilment of the requirements used as a basis by the Authority for the adoption of the decision to proceed with certification, is still under way, with reference in particular to the shareholder structure and ownership chain of Snam Rete Gas.

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