4 Nov 2013 14:50
GRUPO CLARIN S.A.
Audiovisual Communication Services Law
Voluntary conforming proposal
On 4 November 2013, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that it had filed to Audiovisual Communication Services Law Federal Enforcement Authority ("AFSCA") a Voluntary Conforming Proposal pursuant to the implementing regulations of Section 161 of the Audiovisual Communication Services Law, set forth under Decree No. 1225/2010 and Chapter I of Annex I of Resolution No. 297/AFSCA/2010. A Spanish version of the Proposal is available in IR Grupo Clarín website (www.grupoclarin.com/ir).
Attached is a free translation of the minutes of the Meeting of the Board of Directors which approved the filing of the Voluntary Conforming Proposal to AFSCA.
Enquiries:
In Buenos Aires:
Alfredo Marín/Agustín Medina Manson
Grupo Clarín
Tel: +5411 4309 7215
Email: investors@grupoclarin.com
In London:
Alex Money/Clare Gallagher
Jasford IR
Tel: +44 20 3289 5300
Email: alexm@jasford.com
In New York:
Melanie Carpenter
I-advize Corporate Communications
Tel: +1 212 406 3692
Email: clarin@i-advize.com
Minutes of the Meeting of the Board of Directors No. 240: In the City of Buenos Aires, on the 1st day of November 2013, at 19.00 hours, the Board of Directors of Grupo Clarín S.A. (the "Company") meets at the Company's corporate headquarters located at Calle Piedras 1743 of this City. Present are Messrs. Directors Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro, Alejandro Alberto Urricelqui, Jorge Carlos Rendo, Pablo César Casey, Lorenzo Calcagno, Alberto César Menzani and Luis María Blaquier and the undersigned members of the Supervisory Committee. Having opened the meeting, Mr. Héctor H. Magnetto submits to the consideration of those present the following point of the agenda: Consideration of the courses of action to follow in accordance with the decision rendered by the Supreme Court in re "Grupo Clarín and others v. National Executive Branch and other re: merely declarative action" File No. 119/2010 (the "Decision"). Mr. José Aranda asks for permission to speak and states that this meeting has been called pursuant to the resolution of the Board of Directors dated as of last 29 October, to analyse and decide, in light of current circumstances, about the courses of action that the working group will recommend to this body, as a result of the tasks that were asked of them. Before the Director Alejandro Urricelqui presents the alternatives under consideration and concludes with the recommendations of the working group, Mr. José Aranda believes it is imperative that the Board put on record that the Company and its group of enterprises (hereinafter, "GC") has always abided by the laws and respected the decisions of the judiciary: all of the judicial claims brought by the Company since the enactment of Law No. 26,522 had the purpose of preserving the assets of the Company and of its shareholders under the firm conviction that the current structure of GC is the most efficient, both from the operational and the economic perspective, for its shareholders, employees, customers, suppliers and the community as a whole. The design of the structure of GC was always made pursuant to general laws and regulations in force, and would not have been possible to achieve without the valuable contribution, both professional and economic, of its shareholders, who reinvested proceeds from the operations of GC to continue to grow and to develop, thus offering the public state-of-the-art services. Since the rendering of the Decision, and the strong negative impact that it causes on GC, the Board has arrived at an historic moment in its entrepreneurial life: this body is about to hear, and will have to make a decision on a strategic formulation and-eventually-measures to implement a future morphology of GC that none of those present, under their administration and using their best managerial judgment would have otherwise even considered-and least of all adopted-had GC not been facing the most hostile and adverse scenario conceivable in a republican country, institutionally protected by the rule of law. This is not about staging an empty clamour of victimisation, but about making explicit, clearly and bluntly, that none of the alternatives that will be considered, which are aimed at finding the least damaging formula to conform to Law No. 26,522 of Audiovisual Communication Services, are the fruit of the initiative of Directors who think that this formula is the one that best responds to the wishes of the shareholders and other multiple interests that, directly and indirectly, are touched by the decisions that will be adopted, from the crusade of a real and not declaimed freedom of expression of ideas of all signs, whether they applaud or criticize the powers that be, to the maintenance of thousands of sources of jobs and productive ventures created under the wing of the efficient progress of GC. It is clear that the alternatives that are recommended, and the one that is finally selected by the Company will be none other than that which the Board understands to be the one that most mitigates the damages caused by having to comply with the Decision, because GC respects, as it always has said, judicial decisions, even when it believes that they contradict not only the principles of the Argentine National Constitution, but also those of International Treaties, such as the American Convention on Human Rights (Pact of San José de Costa Rica). Therefore, there is no option other than to deal with the imposition of a law that, among other things, openly infringes rights and guarantees as essential and significant as the freedom of speech, the right to property and the guarantee of free exercise of trade, and is contrary to the most elementary legal regime. Mr. Aranda manifests that each of the Directors present here lives through this moment and will live through those that the coming weeks may bring, as those with the most harmful perspective for the Company: the entire strategy deployed up to this point for decades, has been to give GC more strength-in human, technological and economic resources-, as well as economies of scale, to face the challenges of its time, never forgetting its mission to give opinions with independence, inform objectively, entertain healthily and make available to the public the latest technologies in audiovisual media. Now, it shall be directed to contain the material economic damages that will overcome GC due to the application of a law imposed on the Company as a consequence of a controversial Decision, to divide what had been thoughtfully and legitimately united under effective law, sell what had been purchased validly and with effort under purely legal regimes, all for the unmasked purpose of silencing voices that are independent from whoever exercises political power in the Republic at a given time. None must, therefore, construe or interpret-not even implicitly-that the adoption of a recommendation such as the one that this Board is about to analyse, implies the abdication of principles, or even less a surrender in our struggle to have the rights of GC recognized in face of this plain and simple subjugation, of which this Company is the object. These are days of oppression for GC. It is inconceivable that this republican creed may be questioned in the middle of the 21st Century; there is no worse sign of institutional setback than to debate whether someone may be deprived of its current peaceful rights, infringing effective licenses with several years to go before expiration, which constitute an acquired right-as also recognized by three of the seven Supreme Court justices-and thus silencing media that currently exercise critical journalism. It is sad for the Republic, painful for the Nation, and naturally, harmful-in particular-for GC and for the many others that will follow. Mr. Aranda states that he has spoken at length because he thought it indispensable to frame adequately the debate that the Board will have in minutes. Therefore, Mr. Aranda urges the Directors that are present to act in the most professional and careful manner possible in the selection of the best alternative, knowing that the Board will not renounce its rights, or tarnish values, or even less, compromise its principles: the Company is in a state of need and with no other alternatives, and it must select a path that will cause the least possible prejudice to its shareholders and employees, trying to prevent the forced sale of its assets by AFSCA. Mr. Aranda's presentation ends and the Chairman grants Mr. Alejandro Urricelqui permission to speak. Mr. Urricelqui presents the different alternatives for the Conforming Plan. Said plan will contemplate the necessary reservations to safeguard the rights of the Company, among which we may mention the following: the reservation to bring the judicial actions that may correspond in connection with the claim for economic damages caused to the Company and its subsidiaries as a consequence of their adjustment to conform to the law; the reservation to challenge the conformity of Sections 41, 45, 48 and 161 of Law No. 26,522 to international conventions before the Inter-American Commission on Human Rights, the Inter-American Court of Human Rights and other competent International Courts; the reservation to challenge judicially the current composition of AFSCA for not conforming to the provisions of Law No. 26,522 and for not being a technical and independent agency protected against undue interferences from the State. Making use of his leave to speak, Mr. Urricelqui says that under the instructions given by this Board on 14 November 2012, in case it became necessary, the Company had charged a working group with the performance of all the actions and dealings that may be necessary to obtain, among other things, an appraisal of the assets of the Company and its subsidiaries and eventually to propose to this Board the plans that they thought pertinent and useful, always protecting the value of the Company. Therefore, and as a consequence of the decision adopted by the Board the previous 29 October, the working group had elaborated different alternatives. The material for their extensive analysis was included in the binders distributed to the Directors. After the presentation of a summary of these alternatives, there is ample debate and exchange of opinions among those present. Given the hour and having made progress on the general aspects of the strategic comparison of strengths and weaknesses of each alternative, the Board unanimously decides to adjourn the meeting and reconvene on 3 November at 18.30 hours, for which all of the Directors present commit their assistance.
At 18.30 hours of 3 November 2013, with sufficient quorum, the meeting of the Board of Directors that had been adjourned on 1 November 2013 is reconvened. Present are Messrs. Directors Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro, Alejandro Alberto Urricelqui, Jorge Carlos Rendo, Pablo César Casey, Lorenzo Calcagno, Alberto César Menzani and Luis María Blaquier and the undersigned members of the Supervisory Committee. After the presentation and detailed comparison of the different alternatives is concluded, the Directors express their opinions about the alternatives that have been submitted to the consideration of the Board. After ample debate, the Chairman invites those Directors who are present to vote for the alternative that allows GC to present, without this implying a waiver of its rights, the "Voluntary Conforming Plan" pursuant to Law No. 26,522 that will result in the least damage to GC, without ever losing sight that this Board must safeguard the rights and patrimonial value of GC. Consequently, and always subject to the reservations of rights and statements that will be made under the corresponding documents, this Board unanimously decides that the Voluntary Conforming Proposal pursuant to the implementing regulations of Section 161 of the Audiovisual Communication Services Law, set forth under Decree No. 1225/2010 and Chapter I of Annex I of Resolution No. 297/AFSCA/2010, is the one summarized as follows: the structure of GC will be divided into six units of audiovisual communication services. Each one of the units of audiovisual communication services will have no corporate relationship with the others. This way, each will conform individually to the provisions of Sections 45 and 46 of the Audiovisual Communication Services Law and its regulations, and will be divided according to the following detail: (i) Unit I: composed by (a) Arte Radiotelevisivo Argentino S.A., owner of the signal of Canal 13 of Buenos Aires and the news signal TN (Todo Noticias). Arte Radiotelevisivo Argentino S.A. will also maintain its participation in (i) Telecor SACI, holder of the license of Canal 12 of Córdoba, and (ii) Bariloche TV S.A., holder of the license of Canal 6 of Bariloche. (b) Radio Mitre S.A., which will maintain the frequencies AM 790 and FM 100 in Buenos Aires, AM 810 and FM 102.9 in Córdoba, and FM 100.3 in Mendoza; and (c) certain assets, liabilities, rights and obligations to be spun off from Cablevisión, which will include 24 local licenses for physical link subscription television, in cities where there is no incompatibility with broadcast TV. (ii) Unit II: composed by the surviving Cablevisión with all the assets, liabilities, rights and obligations that are not spun off from Cablevisión S.A. This company will comprise 24 licenses for physical link subscription television. (iii) Unit III: composed by spun off Cablevisión 2, which will comprise assets, rights and obligations spun off from Cablevisión S.A., including 18 licenses for physical link subscription television and 1 license for radio-electric link subscription television. (iv) Unit IV: (a) composed by Inversora de Eventos S.A., owner of the signals TyC Sports and TyC Max; (b) the signals El 13 Satelital, Magazine, Volver, Quiero Música en mi Idioma, Canal Rural and Metro-the latter involves only the registration for its commercialisation-. (v) Unit V: integrated by an individual or legal entity that will not maintain a corporate relationship with Radio Mitre S.A., its controlling companies, subsidiaries and/or controlled companies, and which shall hold: (a) one sound frequency modulation broadcasting service for the City of Tucumán-FM 99.5-awarded pursuant to Resolutions No. 1325/COMFER/99 and 749/COMFER/2000, (b) one sound frequency modulation broadcasting service for the City of San Carlos de Bariloche-FM 92.1-originally awarded to Mr. Jorge Frettes and today under the process to authorise transfer in favour of Radio Mitre S.A., (c) one sound frequency modulation broadcasting service for the City of Santa Fe-FM 99.3-originally awarded pursuant to Resolutions No. 1003/COMFER/99 and 952/COMFER/2000 to FM 100 S.A. and then transferred to Radio Mitre S.A., and (d) sound frequency modulation broadcasting service for the City of Bahía Blanca-FM 96.5 originally awarded pursuant to Resolutions No. 522/COMFER/99 and 741/COMFER/2000. (vi) Unit VI: integrated by an individual or legal entity that will not maintain a corporate relationship with Arte Radiotelevisivo Argentino S.A. its controlling companies, subsidiaries and/or controlled companies, and which shall hold one broadcast television license for the City of Bahía Blanca, Province of Buenos Aires-LU81 TV Canal 7-and one broadcast television license in the locality of Mendoza-LV83 TV Canal 9 Mendoza-. The Company will continue to own, directly or indirectly, only one of the audiovisual communication service Units of the six that were described above. Finally, the Board also decides unanimously to vest (1) on Messrs. Directors José A. Aranda, Lucio R. Pagliaro, Alejandro A. Urricelqui, Jorge C. Rendo and Pablo C. Casey, jointly, alternatively or individually, the power to (a) execute in final form, the documents relating to the Conforming Plan that may correspond, including without limitation those that have been considered as draft proposal and exhibits that were made available to the members of the Board, (b) analyse the engagement of advisors to instrument the Conforming Plan once such plan is approved, and (c) perform whatever other actions may be necessary and/or convenient for the implementation of the decision that was adopted, including, but not limited to, issuing any complementary or supplementary document that may be necessary, and (2) on Dr. María de los Milagros Páez and/or any of the attorneys in fact of the Company, the latter in the form indicated under the power of attorney that may correspond, the power to execute the Voluntary Conforming Plan approved herein and make the filing of such plan and other documents that may correspond before AFSCA, the corresponding courts of justice and other agencies and institutions that may correspond. It is also decided unanimously the Board will call an Extraordinary Shareholders Meeting in order to consider the Conforming Plan once such plan has been approved by AFSCA. With no further matters to consider, the meeting ends at 22.00 hours.
Signed by:
Members of the Board:Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro, Alejandro Alberto Urricelqui, Jorge Carlos Rendo, Pablo César Casey, Lorenzo Calcagno, Alberto César Menzani and Luis María Blaquier
Members of the Supervisory Committee: Pablo San Martín, Raúl Antonio Moran and Carlos Alberto Pedro Di Candia