Communication no. 1-2023 - CONSOB AND ITS ACTIVITIES
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More transparency for shareholders and the market in capital strengthening transactions reserved for a single investor: this is the meaning of a Communication of Consob in force as of today, 4 May 2023, which updates and reorganizes the disclosure requirements for issuers in the event of capital raising through non-standard Convertible Bond Loans (POCs) and also provides guidance for reserved capital increases such as SEDA (Stand-by Equity Distribution Agreement) and SEF (Step-up Equity Financing), already regulated in two previous Consob Communications, now repealed.
The Communication (No. 1/2023 entitled "Capital Enhancement Transactions Reserved to a Single Investor: non-standard POCs, SEDA, SEF and other transactions with similar characteristics - Requests pursuant to Article no. 114 (5) of Legislative Decree No. 58 of 1998") recalls the need to emphasize the contractual clauses of non-standard POCs, the destination of the capital increase resulting from the transaction, the risks of potential depreciation of the issuer's shares, and the estimate of its overall net financial requirements.
In addition to defining the disclosure requirements for non-standard POC issues, the Communication also systematizes the matter into consideration. The Communication follows the market consultation which concluded on 1 March and was adopted on 3 May 2023.
Guidance is also provided to single investors-subscribers on trading in the shares of issuing companies and related instruments. For sole investors in companies whose shares are traded on multilateral trading facilities (MTFs), in the interests of proportionality, disclosure to the public is only recommended, limited to cases where investors hold, in the same company, a shareholding that is deemed significant (at least 5 per cent of the relevant share capital).
