SECN.L Regulatory News (SECN)

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER FOR SALE OF ANY SECURITIES OR AN OFFER OR INVITATION TO PURCHASE ANY SECURITIES IN ANY JURISDICTION OR A SOLICITATION OF ANY VOTE OR APPROVAL.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, AUSTRALIA OR IN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

19 January 2022

SEC Newgate S.p.A. ("SEC Newgate" or the "Company")

Proposed cancellation of admission to trading on AIM

and

€49 million Financing Agreement with Three Hills Capital Partners to finance the future strategy and growth of the Group

SEC Newgate (AIM:SECN), the insight-driven global strategic communications group that works at the nexus of business, politics, communities, markets and media, announces its intention to seek shareholder approval for the cancellation of the Company's ordinary shares ("Ordinary Shares") to trading on AIM ("Delisting").

Furthermore, the Company announces that it has entered into financing arrangements and certain related agreements with Three Hills Capital Partners S.A., acting as general partner of the Three Hills Capital Solutions III fund ("THCP") to provide €49 million funding for the future strategy and growth of SEC Newgate and its subsidiaries the "Group") conditional upon the Delisting (the "Transaction").

Summary highlights

· Framework and Contribution Agreement entered into with THCP, a leading pan-European structured capital provider, to provide the capital and resources to, inter alia, pursue potential acquisitions in the key markets of the United States and Latin America

· Irrevocable commitments for 76.57% of SEC Existing Ordinary Shares to contribute their SEC Newgate Ordinary Shares into NewCo, a newly-incorporated private vehicle, and to vote in favour of the Delisting

· Restructuring of Inveready convertible bonds, Retro Grand convertible loan and Hawk discounted capital bond

· Minority shareholders to be offered exit opportunity at 111.32p per Ordinary Share ("Buy-back Price") via a share repurchase plan ("Buy-back")

· Equity and debt financing up to a total €49 million (inclusive of the Buy-back financing)

· Transaction conditional upon Delisting

· General Meeting to be convened to approve the Delisting and authorise SEC Newgate to repurchase Ordinary Shares pursuant to the Buy-back

· Delisting expected to occur late February/beginning of March 2022, with completion of the Transaction to follow thereafter

Commenting on the announcement, Fiorenzo Tagliabue, Group Chief Executive, said:

"This is a transformational milestone in the history of our Group. In September 2019 we embarked on a three-year strategic plan. It began with the merger that created SEC Newgate. Since then, we have achieved so much across our footprint of 38 offices across 5 continents. This next step will provide the investment needed to realise our ambitions and provide the flexibility to make more entrepreneurial decisions, and to access to the capital we need to invest in our business and people.

A circular ("Circular") will be sent to Shareholders shortly with details of the Transaction, the proposed Delisting and the Buy-back, and convening a General Meeting to seek Shareholder approval for the Delisting and authorities to implement the Buy-back.

In this announcement, references to Ordinary Shares shall mean Ordinary Shares and/or CREST Depositary Interests ("CDIs"), and references to Shareholders shall mean holders of Ordinary Shares and/or holders of CDIs, as relevant and in context.

Unless defined to the contrary, defined terms shall have the meaning as set out in the Definitions sections at the end of this announcement.

Media Enquiries

Market Abuse Regulation (MAR) Disclosure

The information contained in this announcement was deemed by the Company, prior to announcement, to constitute inside information as stipulated under Article 7 of the Market Abuse Regulations (EU) No 596/2014, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

The person responsible for making this announcement on behalf of SEC Newgate is Fiorenzo Tagliabue.

Notes to Editors

· SEC Newgate's focus is on achieving positive outcomes through communications, advocacy and research, helping clients clearly demonstrate their purpose, value, and impact locally, nationally and internationally.

· Further information is available at the Group's website: www.secnewgate.com

· Further information on SEC Newgate UK is available at: www.secnewgate.co.uk 

Regulatory Disclaimers

This announcement is for information purposes only and does not constitute an offer for sale of any securities or an offer or invitation to purchase any securities in any jurisdiction or a solicitation of any vote or approval.

Arden Partners plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and broker to the Company in connection with the Buy-back and will not be acting for any other person or otherwise be responsible to any person for providing the protections afforded to clients of Arden Partners plc or for advising any other person in respect of the Buy-back or any transaction, matter or arrangement referred to in this announcement. Arden Partners plc's responsibilities as the Company's nominated adviser and broker are owed solely to London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his decision to acquire shares in the Company in reliance on any part of this announcement.

Cautionary Statement

This announcement may contain certain forward-looking statements, including with respect to the SEC Newgate's current targets, expectations and projections about future performance, anticipated events or trends and other matters that are not historical facts. These forward ‐ looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations, made in good faith and based on the information available to them at the time of the announcement. Such statements involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward ‐ looking statement and should be treated with caution. Any forward-looking statements made in this announcement by or on behalf of SEC Newgate speak only as of the date they are made. Except as required by applicable law or regulation, SEC Newgate expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Background, Proposals and Future Strategy

Following the merger of SEC S.p.A. with Porta Communications Plc in September 2019 to create SEC Newgate, a primary objective of the Group has been to establish a strong presence in the United States and Latin America, to complement the Group's continuing acquisition strategy and organic growth momentum in strategic areas of the world, in particular in Europe and Asia Pacific.

The US comprises the world's largest market for the communications industry, where many major global players are head-quartered or maintain a robust business base. A strong presence in the United States would allow SEC Newgate to provide a consistent and seamless service in the corporate and institutional domains along the Washington-New York-London-Brussels-Hong Kong-Beijing axis.

In order to pursue this strategic ambition, the Company has entered into a "Framework and Contribution Agreement" with THCP, a European mid-market private equity investment firm, to provide the capital and resources to, inter alia, pursue potential acquisitions in these key markets.

The Transaction is conditional upon, inter alia, the Delisting, further details of which are set out below.

Pursuant to the Transaction: (i) certain SEC Newgate shareholders comprising, in aggregate, 76.57% of the Existing Ordinary Shares have irrevocably committed to vote in favour of the Delisting and to contribute their Ordinary Shares to a newly-incorporated private vehicle ("NewCo") to be established by an affiliate of THCP and (ii) THCP has undertaken, inter alia, to provide certain agreed funding to SEC and NewCo.

Shareholders comprising the balance of 23.43% Ordinary Shares will not be able to contribute their Ordinary Shares into NewCo. In order to provide an exit opportunity for those Shareholders, should they so wish, the Company will, subject to the passing of the Resolutions, implement a programme to buy back such shares at a fixed price of 111.32p, representing a premium of 29% to the SEC Newgate share price of 86.5p at the close of trading on 18 January 2022, being the last practicable date prior to the date of this announcement. The Buy-back will be funded through the SEC Bond with financing of €12.5 million provided by THCP. Further details are set out below.

In connection with the Transaction there may be restructuring of the shareholdings of SEC Newgate's non-wholly owned subsidiaries.

Framework and Contribution Agreement

On 18 January 2022, the Framework and Contribution Agreement was entered into between the Company, Fiorenzo Tagliabue, Retro Grand Limited ("Retro Grand"), Hawk Investments Limited ("Hawk"), THCP and an affiliate of THCP, TH Ambrogio S.r.l. ("TH Ambrogio").

The purpose of the Framework and Contribution Agreement is to govern the terms and conditions of the Transaction, including, among other things, the Delisting, Buy-back, Contribution and issuance of the SEC Bond and the NewCo Bond. It also governs the relationship between the parties as direct shareholders of NewCo and indirect shareholders of SEC Newgate, following completion of the Transaction.

Pursuant to the terms of the Framework and Contribution Agreement, completion of the Transaction is conditional upon the Delisting having become effective, the relevant parties having duly complied with their obligations under the Framework and Contribution Agreement and no event having occurred triggering a mandatory prepayment event or an event of default under the SEC Bond.

The Framework and Contribution Agreement provides that:

(A) a shareholders' meeting of SEC Newgate shall be called to approve (i) the Delisting pursuant to article 13 of the SEC Newgate's by-laws and the AIM Rules, requiring the approval of 75% of the shareholders present and voting at the meeting; (ii) authority to purchase Ordinary Shares pursuant to Article 2357 et seq. of the Italian Civil Code in order to facilitate the Buy-back;

(B) if the Delisting is approved at the General Meeting, the Buy-back will be launched pursuant to which SEC Newgate will carry out a buy-back of a maximum of 9,168,882 Ordinary Shares (inclusive of the Inveready Shares, as detailed further below), allowing all Shareholders who are not participating in the Contribution to sell their Ordinary Shares. The Buy-back will be available for 90-days from launch;

(C) the Buy-back will be funded through the issuance of a bond of €12.5 million, to be issued by SEC Newgate and subscribed and paid for by THCP ("SEC Bond"). Any unused amount of the SEC Bond as of the end date of the Buy-back period (the "Unused Amount of the SEC Bond") to be applied to redeem a corresponding amount of the SEC Bond;

(D) Retro Grand undertakes to convert the Retro Grand Convertible Loan;

(E) following the completion of the Delisting:

(i) Fiorenzo Tagliabue and Retro Grand together with certain existing management and key shareholders of SEC Newgate ("Contributing Shareholders") will contribute their Ordinary Shares ("Contribution") into a newly incorporated vehicle ("NewCo") wholly owned by TH Ambrogio. As a result of the Contribution, 28% of the corporate capital of NewCo shall remain with TH Ambrogio while the remaining 72% stake will be held, pro quota, by the Contributing Shareholders. The share structure of SEC Newgate and the percentage dilution of the shareholders as a result of the capital increase will be disclosed in the documentation to be provided by the SEC Newgate pursuant to article 2441 of the Italian Civil Code;

(ii) NewCo will issue a bond for an amount of Euro 36.5 million (as possibly increased by an amount corresponding to any Unused Amount of the SEC Bond) ("NewCo Bond") that will be entirely subscribed and paid for by THCP and NewCo will use the proceeds of such bond (a) partly, to subscribe and pay for a corporate capital increase of SEC Newgate; and (b) partly, to grant to SEC Newgate a shareholder loan. The proceeds of the capital increase and the shareholder loan will be used by SEC Newgate to pursue its M&A strategy;

(F) a management incentive package ("MIP") for key managers shall be put in place following completion of the Transaction.

NewCo Bond and SEC Bond

The SEC Bond proceeds will be used to fund the Buy-back and will bear (i) simple interest at the rate of 3.0% p.a. payable in cash semi-annually, (ii) simple interest at the rate of 5.0% p.a. payable at maturity, and (iii) an arrangement fee; with a maturity date of 6 years from the issuance.

Any unused amount of the SEC Bond as of the end date of the Buy-back period (i.e. 90 days) will be applied to redeem a corresponding amount of the SEC Bond.

SEC Newgate may repay the SEC Bond at any time without penalties (subject to a non-call provision, i.e., in case of prepayment during the first 3 years, interest will be due up to the expiration of the third year).

The NewCo Bond terms and conditions are substantially identical to those of the SEC Bond.

Directors' and certain other shareholders' intentions regarding the Transaction

As set out above, the Contributing Shareholders have irrevocably committed to contribute their Ordinary Shares into NewCo, comprising in aggregate 18,920,355 Ordinary Shares, being 76.57% of the Existing Ordinary Shares. Furthermore, the Contributing Shareholders have irrevocably committed to vote in favour of the Resolutions to be proposed at the General Meeting to be convened to implement the Transaction.

1 Retro Grand Limited holding as of the date of this announcement. At the closing of the Transaction, Retro Grand Limited will also contribute into NewCo the 344,953 new Ordinary Shares resulting from the conversion of the Loan, as set out further below.

Inveready Bond, Retro Grand Loan and Hawk Bond variation agreements

On 18 January 2022, Inveready Convertible Finance I, F.C.R., Inveready Convertible Finance Capital Scr Sa (jointly "Inveready"), the Company and Newgate Communications Limited, entered into an agreement ("Inveready Agreement") pursuant to which the conversion terms of the 3.5% Bonds 2020-2027 issued on 4 March 2020 and convertible into Ordinary Shares ("Inveready Bonds"), have been amended. Subject to (i) the Board of Directors of the SEC Newgate approving the final terms of the Transaction; and (ii) the Shareholders general meeting of SEC Newgate having approved the (A) the Delisting and (B) the Buy-back, upon conversion of the Inveready Bonds the Company's shall issue, in aggregate, 3,378,315 new Ordinary Shares ("Inveready Shares"). Furthermore, SEC Newgate has irrevocably and unconditionally agreed to buy back from Inveready all 3,378,315 new Ordinary Shares issued upon conversion of the Inveready Bonds at an aggregate purchase price of Euro 4,500,000 (representing a price of 111.32p per Ordinary Share). The Inveready Shares shall be issued and bought back immediately following the Delisting. Failure by the Company to deliver the Inveready Shares, perform its obligations under the Inveready Agreement or pay the purchase price for the Inveready Shares each constitute an event of default under the terms of the Inveready Agreement. If an event of default occurs under the Inveready Agreement then the Company shall be required to pay Inveready the amount of Euro 4,500,000 or of Euro 6,000,000 (in case of the failure to pay the purchase price after conversion by the closing date). Upon payment of such amount the Bonds shall be finally cancelled.

On 18 January 2022, UKFH (previously known as Porta Communication Plc) ("UKFH"), the Company and Retro Grand Limited ("Retro Grand") entered into a deed of variation ("Retro Grand Variation") in relation to the conversion terms of the Convertible Loan Agreement Undertaking dated 11 June 2019 ("Loan") pursuant to which they have agreed that (i) conditional on and immediately following completion of the Transaction, UKFH will transfer its rights, obligations and liabilities to the Company and the Company will assume the same ("Transfer"), including the debt due from UKFH to Retro Grand pursuant to the Loan with UKFH's full release effective against Retro Grand and following such transfer, Retro Grand will release UKFH from all of its obligations under the Loan; and (ii) conditional on and simultaneously with completion of the Transaction and the Transfer, the conversion of the residual amount of the capital due on the Loan, being £383,600.73 into 344,593 new Ordinary Shares (representing a conversion price of 111.32p).

On 18 January 2022, UKFH and Hawk Investments Holding Limited entered into a deed of variation and waiver ("Hawk Variation") relating to the Discounted Capital Bond dated 3 August 2017 ("Hawk Bond") pursuant to which they have agreed among other things, (i) to extend the redemption date referred to in the Hawk Bond from 14 April 2023 to 23 April 2026 and (ii) to ensure that the Company will pay to Hawk Investments Holding Limited an arrangement fee in respect of the variation of the Hawk Bond in an amount equivalent to 1 per cent. of the outstanding amount of the Hawk Bond, which will be paid by 31 March 2022.

Related Party Transactions

Fiorenzo Tagliabue is a director of SEC Newgate and substantial shareholder. Morton PTC Limited, as the trustee of the Edward Morton Family Trust, is the legal owner of Retro Grand (a substantial shareholder of the Company), and as the trustee of the Morton Family Trust, is the legal owner of Hawk. As a result, the entering into the Framework and Contribution Agreement and the contribution of SEC shares into NewCo by those related parties constitute related party transactions pursuant to Rule 13 of the AIM Rules. In addition, the Retro Grand Variation and Hawk Variation constitute related party transactions pursuant to Rule 13 of the AIM Rules.

John Foley, Emma Kane, Brian Tyson, Mark Glover and Andrea Cornelli (each, SEC Newgate directors) and Silvia Mazzucca (spouse of Fiorenzo Tagliabue) are related parties under the AIM Rules. As a result, the commitments for the contribution of SEC shares into NewCo by those related parties constitute related party transactions pursuant to Rule 13 of the AIM Rules.

Accordingly, the independent Directors of the Company (being David Mathewson, Paola Bruni, Luigi Roth, Sergio Penna and Tom Parker), having consulted with the Company's Nominated Adviser, Arden Partners, consider that the terms of these transactions are fair and reasonable in so far as the Company's shareholders are concerned.

Current Trading

The Company expects a strong performance for the year ended 31 December 2021, significantly ahead of budget forecasts, with over €1m of EBITDA delivered during November alone.

Unaudited consolidated results (pre-minority interests) for the 11 months to November 2021 showed revenue of €78.6m, EBITDA of €10.6m and a PBT of €5.8m. In the same period, organic consolidated results (excluding acquisitions) showed revenues of €68.1m, EBITDA of €9.7m and PBT of € 5.0m.

All major business segments have continued to deliver strong performances over the last two quarters.

At the end of 2021 the transfer of shares from Twister Group to SEC Newgate was been completed and SEC Newgate will therefore consolidate the figures for SEC Newgate ME, based in Dubai, from 1 January 2022.

Particular new business achievements include securing a three-year project funded by the EU aimed at promoting Italian food abroad; the project covers 11 countries and is worth about €5m over its term. The Company believes this project creates a solid track record ahead of future EU-funded tenders, and highlights the increasing trend in cross selling and intercompany business which accounted for over €300k of profit in the last quarter, with further significant prospects in the pipeline.

Delisting and Buy-back

a.) Reasons for Delisting

The Company believes that the Transaction and, consequently, the Delisting is the most appropriate means to achieve the Group's strategy, and has taken the following into consideration.

1. The Group requires additional financial resources in order to pursue its strategic and growth ambitions to grow in certain strategic areas of the world, primarily in the United States - where it launched a successful start-up in July 2020. SEC Newgate believes that its presence in the US should be more significant in order to become a recognised international player - and also in other strategic markets, for example Latin America.

2. The Board considers that the Company would not be able to raise sufficient funds on the capital markets, in order to support the envisaged growth.

3. The Transaction would provide certainty of financial resources to the Group.

4. The Directors believe that the market has not been able to properly appreciate the value created since the merger of SEC S.p.A. and Porta Communications Group Plc in September 2019, which created a more profitable business and a significant international footprint and platform to tackle new opportunities.

5. Trading volumes in the Ordinary Shares on AIM have been low. As a consequence, Shareholders often have difficulty trading their Ordinary Shares and trading can negatively impact the SEC Newgate share price.

6. As an Italian-incorporated company, the Company expends significant time and costs in order to be compliant with a dual system of UK regulations, legal provisions, and the Italian unlisted companies' rules. The Delisting enables the Company to refocus these resources and costs into the business.

b.) Effect of Delisting

The principal effects of the Delisting will be that:

· Shareholders will no longer be able to buy and sell Ordinary Shares (or CDIs representing Ordinary Shares) through a public stock market, further reducing the liquidity in the Ordinary Shares;

· the Company will no longer be required to announce material events, final or interim results;

· the Company will no longer be required to comply with many of the corporate governance requirements applicable to companies traded on AIM;

· the Company will no longer be subject to the Disclosure, Guidance and Transparency Rules and will therefore no longer be required to disclose major shareholdings in the Company;

· the Company will no longer be subject to the AIM Rules, with the consequence that Ordinary Shareholders will no longer be afforded the protections given by the AIM Rules. Such protections include a requirement to obtain shareholder approval for reverse takeovers and fundamental changes in the Company's business and to announce, inter alia, certain substantial and/ or related party transactions; and

· the Delisting may have either positive or negative taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately.

c.) Delisting Process

Under the AIM Rules, the Delisting can only be effected by the Company after securing a special resolution of Shareholders in a general meeting and the expiry of a period of 20 clear Business Days from the date on which notice of the Delisting is given to the London Stock Exchange. In addition, a period of at least 5 clear Business Days following Shareholders' approval of the Delisting is required before the Delisting may become effective.

The Company will shortly be convening a General Meeting at which Shareholder approval will be sought for (amongst other matters) the Delisting. The resolution approving the Delisting will be conditional upon the approval of a resolution approving the repurchase of Ordinary Shares which is necessary to enable the Company's to implement the Buy-back.

Assuming that the Resolutions are approved, it is expected that the Delisting will take place in late February / early March 2022.

d.) Share Purchase Plan

Subject to the approval of the resolutions to be proposed at the General Meeting, SEC Newgate will establish a share purchase plan to buy back Ordinary Shares for a period of 90 days.

Under the Buy-back SEC Newgate will instruct Arden Partners to make, in the period before Delisting, on-market purchases of the Company's Ordinary Shares up to an aggregate amount of 5,790,567 (such figure excluding the SEC shares to be issued pursuant to the Inveready Agreement) at a fixed price of 111.32p per share. Notwithstanding the price and daily volume restrictions set out in the Commission Delegated Regulation (EU) 2016/1052, the Company will make purchases outside of these price and volume restrictions at the Buy-back Price. Further details of the Buy-back and its terms and conditions, including the relevant duration, will be disclosed before the commencement of the Buy-back.

Should any minority shareholders remain in the corporate capital of SEC after completion of the Delisting, the Buy-back will continue post-Delisting (for an overall period of 90 days) as indicated under paragraph e) below.

e.) Ordinary Share dealing following Delisting

Following the Delisting, there will be no market facility for dealing in the Ordinary Shares, no price will be publicly quoted for the Ordinary Shares and the transfer of Ordinary Shares will be subject to the provisions of the Bylaws. The Buy-back will continue post-Delisting, as set out below, by means of a facility to be implemented by the Company, who will communicate the Buy-back offer to the minority shareholders post-Delisting.

f.) Corporate Governance

Following completion of the Delisting, the Company does not intend to continue to comply with the QCA Corporate Governance Code.

The Company will continue to hold annual general meetings. The Company will also adopt new bylaws that are suitable for a private company whose shares are not traded on a public market.

Buy-back and non-Contributing Shareholders

Subject to the approval of the Resolutions to be proposed at the General Meeting, the Company will implement a Buy-back, to provide the opportunity for the non-Contributing Shareholders to sell all, some or none of their Ordinary Shares at a fixed price of 111.32p per Ordinary Share (being a premium of 29% on the closing price of SEC Newgate Ordinary Shares on 18 January 2022), depending on their own liquidity requirements and their view on the prospects of the Company going forward. The Contributing Shareholders have undertaken not to sell their Ordinary Shares in the Buy-back.

The Buy-back will be made available, in the first instance through on-market share repurchases and, following Delisting, through a facility to be implemented by SEC Newgate, for an overall period of 90 days. Further details of the Buy-back will be set out in the Notice of General Meeting to be sent to Shareholders.

The Buy-back is to be financed by the SEC Bond and Ordinary Shares repurchased by the Company under the Buy-back may be cancelled or retained in treasury.

Eligible Shareholders should be aware that if the Resolutions are approved by the requisite majority and Delisting occurs, in the event they retain a holding in Ordinary Shares at Delisting, they will hold their Ordinary Shares in an unlisted company. While the Ordinary Shares will remain freely transferable, it is likely that the liquidity and marketability of the Ordinary Shares will, in the future, be constrained and the value of the Ordinary Shares may be adversely affected as a consequence.

Takeover Code

The Takeover Code does not apply to the Company but the Company's Bylaws do contain mandatory bid requirements. The mandatory takeover provisions will not be triggered by the Transaction as the Contribution will occur following Delisting.

After the Delisting the Company's Bylaw provisions on mandatory takeover will cease to have effect and consequently the new SEC Newgate Bylaws will not provide any protection to minority Shareholders with respect of the execution of the Transaction.

General Meeting

The Company requires Shareholder approval for (i) the Delisting and (ii) to purchase Ordinary Shares pursuant to Article 2357 et seq. of the Italian Civil Code to implement the Buy-back.

From an Italian law compliance perspective, it should be noted that, pursuant to the provisions of Articles 2357 and 2357-ter of the Italian Civil Code, the Buy-back of Ordinary Shares must be authorised by the Shareholders' Meeting, which shall determine the terms and conditions of the purchase, indicating in particular the maximum number of shares to be purchased, the duration (not exceeding eighteen months) for which the authorisation is granted, the minimum consideration and the maximum consideration.

A notice convening a General Meeting of the Company at which Resolutions will be proposed to authorise the Delisting and for the Company to make the repurchase of Ordinary Shares which is necessary to implement the Buy-back, will be sent to Shareholders shortly.

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires: