Significant events

SIGNIFICANT EVENTS IN 2011

Demerger of Fiat activities and transfer to Fiat Industrial

During 2010, the Fiat Group initiated and completed a strategic project to separate the Agricultural and Construction Equipment (CNH sector) and Trucks and Commercial Vehicles (Iveco) activities, as well as the “Industrial & Marine” business line of FPT Powertrain Technologies (FPT Industrial sector) from the Automobile and Automobile‑related Components and Production Systems activities, which include the sectors Fiat Group Automobiles, Maserati, Ferrari, Magneti Marelli, Teksid, Comau and the Passenger & Commercial Vehicles business line of FPT Powertrain Technologies.

The separation of those businesses, in the form of their partial proportional demerger from Fiat S.p.A. and transfer to Fiat Industrial S.p.A. resulted in the creation of the new Fiat Industrial Group (consisting of CNH, Iveco and FPT Industrial) on January 1, 2011. From the same date until the date of the consolidation of Chrysler, discussed later in the report, the Fiat Group post-demerger is comprised of Fiat Group Automobiles, Maserati, Ferrari, Fiat Powertrain, Magneti Marelli, Teksid and Comau. On January 3, 2011, Fiat Industrial S.p.A. shares began trading on the Electronic Share Market managed by Borsa Italiana S.p.A.

For every Fiat S.p.A. ordinary, preferred and savings share held EXOR S.p.A. received one Fiat Industrial S.p.A. share of the corresponding class of shares.

Changes in corporate positions, relative compensation and organizational structure

In the meeting held on February 11, 2011, the EXOR board of directors named John Elkann chief executive officer in addition to his role as chairman of the board. Carlo Barel di Sant’Albano resigned from the position of chief executive officer.

On March 31, 2011, the chief administration officer and manager charged with preparing the company's corporate financial reports, Mr Aldo Mazzia, left EXOR to take up operational positions in the subsidiary Juventus Football Club and was replaced by the chief financial officer, Mr Enrico Vellano, in the role of the manager responsible for the preparation of the corporate financial reports beginning April 1, 2011.

Based on the proposal by the Compensation and Nominating Committee, the board of directors in its meeting held on March 28, 2011 voted to increase the annual compensation of Mr Elkann from €1 million to €2 million by virtue of the new operational positions he has assumed within the Company.

On the same date, the board of directors took note that, as a result of Mr Sant’Albano’s resignation as chief executive officer, he relinquished the 3,000,000 option rights granted to him under the EXOR Stock Option Plan 2008-2019. Moreover, since this was a voluntary resignation, he will not be entitled to the indemnity of €2.5 million on the expiry of his term of office. The board of directors also voted to maintain Mr Sant’Albano’s existing insurance coverage and the use of the Company’s apartment in Turin until December 31, 2011. Finally, the board of directors, in accordance with the motion submitted by the Compensation and Nominating Committee, voted to grant Mr Elkann, by virtue of the new operational positions he was conferred, 3,000,000 options, corresponding to 795,000 EXOR ordinary shares, under the EXOR Stock Option Plan 2008-2019.

Investments in Gruppo Banca Leonardo

In March 2011, EXOR S.A. purchased a total of 7,576,662 Gruppo Banca Leonardo S.p.A. ordinary shares (2.90% of share capital) at a price per share of €2.38 for a total of €18 million. EXOR S.A. now holds 45,459,968 Gruppo Banca Leonardo S.p.A. ordinary shares equal to 17.40% of its capital.

Subscription to Almacantar share capital increases

In the second quarter of 2011, Almacantar carried out a number of share capital increases. On June 20, 2011, Almacantar voted to adopt the British Pound sterling as its functional currency and converted its share capital accordingly. At this date, EXOR S.A. holds a 36.29% stake (54.98% at December 31, 2010) for a total investment of £100.3 million (€113.9 million), of which £40.3 million (€48.3 million) is still payable.
EXOR S.A.’s commitments to subscribe to further Almacantar capital increases are considered to have been met according to the agreements reached on April 16, 2010, as modified on June 15, 2011.

Resolutions passed by the shareholders’ meeting

The April 28, 2011 EXOR shareholders’ meeting approved the separate financial statements for the year 2010 and resolved to pay dividends of €0.31 per ordinary share, €0.3617 per preferred share and €0.3881 per savings share for a total maximum amount of €75.9 million. The dividends became payable starting on May 26, 2011.

The same shareholders’ meeting also confirmed Mr Sergio Marchionne as a director of the Company. The shareholders’ meeting also voted to renew the authorization for the purchase, also through subsidiaries and for the next 18 months, of the three classes of EXOR shares for a maximum number that is not to exceed the limit established by law. Finally, the meeting gave its approval, based on the proposal put forward by the board of statutory auditors, to the appointment of Reconta Ernst & Young S.p.A. as the auditors for the years 2012-2020 for the audit of the separate financial statements of EXOR S.p.A. and the consolidated financial statements of the EXOR Group.

EXOR bond issue

On May 9, 2011, out of a total amount of €1 billion authorized by the board of directors on March 28, 2011, EXOR S.p.A. issued non-convertible bonds for Japanese yen 10 billion (about €83 million). The bonds will pay 2.80% interest in Japanese yen and the term is 20 years. The exchange risk on the bonds is hedged by a cross currency swap. The cost in Euro after this transaction is equal to 6.012% per year.

Sale of the building located in Turin, Corso Matteotti 26, and merger by incorporation of EXOR Services S.c.p.a. in EXOR S.p.A.

In June 2011, the subsidiary EXOR Services S.c.p.a. finalized the sale of the building in Corso Matteotti 26 for a price of €18.2 million. The transaction generated a gain of €7.1 million.

On November 24, 2011, having fulfilled its mission upon the sale of the above building, the merger deed was signed for the incorporation of EXOR Services S.c.p.a. in EXOR S.p.A., with effect for legal purposes from December 1, 2011 and accounting and tax purposes from January 1, 2011.

Repayment of the loan extended to C&W Group

On June 27, 2011, C&W Group completely repaid the credit line extended by EXOR S.p.A. for a maximum amount of $50 million.

Exercise of options linked to Alpitour shares

On July 14, 2011, the recipients of the stock option plan linked to Alpitour shares exercised the option rights for all the shares granted in the past.

In accordance with the supplementary agreement sealed between the parties on June 10, 2011, the fair value of the options, paid to the two recipients, was equal to €21.1 million, basically in line with the amount accrued in the financial statements at December 31, 2010.

Buyback of treasury stock

Under the buyback Programs for treasury stock approved by the board of directors on May 12, 2011 and August 29, 2011, during 2011, EXOR purchased 2,619,500 ordinary shares (1.63% of the class) at an average cost per share of €16.15 for a total of €42.3 million, 1,450,900 preferred shares (1.89% of the class) at an average cost per share of €15.72 for a total of €22.8 million, and also 244,010 savings shares (2.66% of the class) at an average cost per share of €14.60 for a total of €3.6 million. The entire investment in 2011 amounted to €68.7 million. 

At December 31, 2011, EXOR S.p.A. held the following treasury stock:

 

Carrying amount
Class of shares Number of
shares
% of
class
Per share (€) Total (€ ml)
Ordinary 6,729,000 4.20 14.03 94.4
Preferred 11,690,684 15.22 11.70 136.8
Savings 665,705 7.26 11.69 7.8
        239.0

Payment against the future capital increase by Juventus Football Club S.p.A

The Juventus Football Club S.p.A. extraordinary shareholders’ meeting held on October 18, 2011 approved the capital increase for a total of €120 million proposed by the board of directors’ meeting held on June 23, 2011. The capital increase aims to provide Juventus with the financial resources necessary to absorb the loss for the financial year 2010/2011 and implement the strategies set out in the Development Plan for the financial years 2011/2012 – 2015/2016.

On September 23, 2011, EXOR S.p.A. paid in its share (60% of Juventus’ capital), amounting to €72 million, of the capital increase approved by the Juventus Football Club shareholders’ meeting, against the future increase in share capital, to ensure that Juventus will continue functioning as a going concern. Furthermore, it also confirmed its commitment to subscribe to a quota in excess of its option rights, for a maximum amount of €9 million, corresponding to the interest held by LAFICO (7.5% of capital).

Also on the same date, Juventus extinguished the line of credit for €70 million extended by EXOR on June 23, 2011 with the early repayment of the loan, for a total of €47.6 million, including accrued interest.

Relocation of EXOR S.p.A.’s headquarters

As of September 19, 2011, the headquarters of the Company was moved to Via Nizza 250, Turin.

Simplification of the capital structure of Fiat S.p.A. and Fiat Industrial S.p.A. and increases in the investments in the two companies

On October 27, 2011, the boards of directors of Fiat S.p.A. and Fiat Industrial S.p.A. resolved to propose to the shareholders the conversion of their companies’ preferred and savings shares into ordinary shares.

EXOR S.p.A. confirmed the intention to maintain its investment in Fiat and Fiat Industrial above the tender offer threshold, even after the conversion and operated on regulated markets according to the need and in keeping with the procedures established by existing law, also with regard to the obligations of communication.

Further information on the operations for the conversion of Fiat S.p.A.’s and Fiat Industrial S.p.A.’s share capital is provided under the “Review of performance of the operating subsidiaries and associates in the Holdings System”.

In November and December EXOR S.p.A. purchased on the stock market 300,000 Fiat ordinary shares (0.03% of the class) 8,916,670 Fiat savings shares (11.16% of the class) and 12,164,441 Fiat Industrial savings shares (15.22% of the class), for a total equivalent amount, respectively, of €1.2 million, €29.9 million and €54.2 million.

Following these transactions, at December 31, 2011 EXOR S.p.A. held:

  • 332,887,447 Fiat ordinary shares (30.47% of the class), 31,082,500 Fiat preferred shares (30.09% of the class) and 11,255,299 Fiat savings shares (14.08% of the class);
  • 332,587,447 Fiat Industrial ordinary shares (30.45% of the class), 31,082,500 Fiat Industrial preferred shares (30.09% of the class) and 14,503,070 Fiat Industrial savings shares (18.15% of the class).

Sale of Alpitour S.p.A.

On December 23, 2011, EXOR reached an agreement for the sale of the investment in Alpitour S.p.A. for €225 million. The buyers are two closed-end private equity funds owned by Wise SGR S.p.A. and J. Hirsch & Co., along with other financial partners including Network Capital Partners. The buyers will carry out the transaction through SEAGULL S.r.l., a special purpose vehicle incorporated and capitalized for the purpose.

According to the agreement, EXOR will receive cash consideration of €210 million, in addition to a deferred payment of €15 million plus interest. The final total consideration will also take into account a performance-related earn-out payment to be calculated on the eventual sale by the investors of their majority interest in Alpitour.

The transaction will result in a gain for EXOR in the separate financial statements of approximately €140 million which will be recorded during 2012.

EXOR will acquire a 10% interest in the vehicle company for €10 million and will also benefit pro rata from any increase in value creation by the company.

Agreement for the sale of the Mandatory Convertible Perfect Vision Bonds

On December 23, 2011, EXOR S.A. signed a contract for the sale of the Mandatory Convertible Perfect Vision Bonds to Vision Investment Management. The contract calls for a price in cash of €9.4 million on the basis of the estimated value at December 31, 2011, as well as warrants which will give EXOR S.A. the right to subscribe to 20% of Vision Investment Management’s capital in the future.

The closing of the transaction, subject to the occurrence of several conditions precedent including the issue of authorizations by the competent authorities, is expected to take place by the end of June 2012.

Criminal case relative to the contents of the press releases issued by IFIL and Giovanni Agnelli e C. on August 24, 2005

Subsequent to filing the motivations for the acquittal verdict, the Public Prosecutor’s Office of Turin, by act of notification to the Company on June 3, 2011, lodged an immediate appeal under ex art. 569 of the Code of Criminal Procedure to the Supreme Court of Cassation. The hearing in the Court of Cassation is set for May 11, 2012.

SIGNIFICANT EVENTS IN THE FIRST QUARTER OF 2012

Subscription to Juventus’ capital increase and purchase of option rights

In January 2012, EXOR S.p.A. subscribed to its entire share of Juventus Football Club’s capital increase, corresponding to 483,736,664 new shares, for a total of €72 million, paid on September 23, 2011.

Moreover, in January 2012, EXOR purchased 9,485,117 option rights offered on the stock market for an outlay of €67 thousand, subscribing to the corresponding 37,940,468 shares for an equivalent amount of €5.6 million (3.765% of share capital). EXOR S.p.A. currently holds 642,611,298 shares, equal to 63.77% of Juventus Football Club’s share capital.

Increase in Fiat and Fiat Industrial investments

During the first quarter of 2012, EXOR S.p.A. purchased on the stock market 7,597,613 Fiat savings shares (9.51% of the class) and 2,826,170 Fiat Industrial savings shares (3.54% of the class) for a total equivalent amount, respectively, of €30.8 million and €16 million.

As of today’s date, pre-conversion of preferred and savings shares to ordinary shares, EXOR S.p.A. in total holds 30% of Fiat S.p.A. share capital and 29.87% of Fiat Industrial S.p.A. share capital divided in the following share classes:

  • 332,887,447 Fiat ordinary shares (30.47% of the class), 31,082,500 Fiat preferred shares (30.09% of the class) and 18,852,912 Fiat savings shares (23.59% of the class);
  • 332,587,447 Fiat Industrial ordinary shares (30.45% of the class), 31,082,500 Fiat Industrial preferred shares (30.09% of the class) and 17,329,240 Fiat Industrial savings shares (21.69% of the class).

In early April 2012, the extraordinary shareholders' meetings and the special shareholders' meetings of Fiat S.p.A. and Fiat Industrial S.p.A. approved the mandatory conversion of the preferred and savings shares of their respective companies into ordinary shares

Dividends and distributions of reserves to be received during 2012

The following table shows the dividends and the distributions of reserves already approved by some of the subsidiaries and associates:

 

Dividends
Holding Class of shares Number of shares Per share Total (€/ml)
Fiat Industrial S.p.A. ordinary 332,587,447 € 0.185 61.5
Fiat Industrial S.p.A. preferred 31,082,500 € 0.185 5.8
Fiat Industrial S.p.A. savings 17,329,240 € 0.2315 4.0
        71.3
Fiat S.p.A.  preferred 31,082,500 € 0.217 6.7
Fiat S.p.A.  savings 18,852,912 € 0.217 4.1
        10.8
Total EXOR S.p.A.'s share to be received       82.1
SGS.  S.A. ordinary 1,173,400  CHF 65 63.2(a)
Gruppo Banca Leonardo S.p.A. ordinary 45,459,968 € 0.681(b) 30.9(b)
Total EXOR S.A.'s share to be received       94.1
(a) CHF 76.3 million converted at the rate of 1.20670 (b) Of which €26.4 million (€0.581 per share) will be recognized as a deduction from the carrying amount of the investment since the distribution is by withdrawal from paid-in capital.

Finalization of the transaction for the sale of the subsidiary Alpitour S.p.A.

On March 13, 2012, EXOR and SEAGULL S.r.l. added an addendum to the December 23, 2011 agreement which, besides establishing a higher remuneration on the deferred price, calls for a commitment from EXOR to purchase from the Alpitour Group a building used as a hotel for an amount of €26 million.

The property will be leased to the Alpitour Group and will guarantee EXOR a return linked to the results of the building’s management, with a minimum guaranteed payment. EXOR is assured of the possibility of selling the building to third parties without any contractual restriction.

The closing of the transaction is expected to take place in April 2012.

 

Commercial Register No.64236277 Legal notes | Credits