December 18, 2019
In the Matter of the Securities Legislation of Ontario (the Jurisdiction)
and
In the Matter of the Process for Cease to be a Reporting Issuer Applications
and
In the Matter of Telecom Italia S.p.A. (also named TIM S.p.A.) (the Filer)
Order
Background
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, Nova Scotia and Newfoundland and Labrador.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
The Filer is a joint stock company established under Italian law on October 29, 1908, with registered offices in Milan, Italy at Via Gaetano Negri 1. The secondary head office of the Filer is located at Corso d’Italia 41, Rome, Italy.
The Filer is a reporting issuer in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Nova Scotia and Newfoundland and Labrador (collectively, the Reporting Jurisdictions) and it is applying for the Order Sought in each Reporting Jurisdiction.
The Ontario Securities Commission was selected as principal regulator because Canadian legal counsel to the Filer is located in Ontario
The Filer became a reporting issuer in the Reporting Jurisdictions in 1997 in connection with a public offering of the Filer’s shares into Canada in the form of ADRs (defined below). There have been no subsequent public or private offerings of securities of the Filer in Canada since 1997.
The Filer is a paper filer in the Reporting Jurisdictions so its continuous disclosure documents are not filed on SEDAR but are publicly available upon request.
The Filer’s continuous disclosure materials are filed under Italian securities laws on the Filer’s website as well as on the regulated storage system 1Info (www.1Info.it), where they are published in both Italian and English.
As of March 31, 2019, the subscribed and fully paid-up capital stock was equal to €11,677,002,855.10 divided into 15,203,122,583 ordinary shares (Ordinary Shares) and 6,027,791,699 savings shares (Savings Shares), all without par value. According to Italian law, Savings Shares circulate either in bearer form or as registered securities, and are therefore identified by two separate sets of ISIN.
The Ordinary Shares and Savings Shares are listed in Italy on the Borsa Italiana stock exchange (the BI). The Ordinary Shares and Savings shares were listed on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs). Each ADS represents 10 Ordinary Shares or Savings Shares, as applicable, and are represented by American Depositary Receipts (ADRs) issued by JPMorgan Chase Bank.
The Filer is the parent company in the TIM group of companies (the TIM Group). The TIM Group consists of over 75 companies. All of the companies in the TIM Group are incorporated outside of Canada and have head offices located outside of Canada. None of the companies in the TIM Group have operations in Canada but engage in commercial relationships with Canadian telecom operators from time to time.
As of April 8, 2019, the Filer had an aggregate principal amount of €13,586 million of senior unsecured bonds (the Euro Bonds) outstanding, with coupons ranging from the 6 month Euro Interbank Offered Rate to 5.250%. The Filer also has £1,225 million of senior unsecured bonds (the GBP Bonds) outstanding, with coupons ranging from 5.875% to 6.375%, and US$1,500 million of 5.303% senior unsecured bonds outstanding (the USD Bonds and, together with the Euro Bonds and GBP Bonds, the TIM Bonds). Almost all of the TIM Bonds are listed on the Luxembourg Stock Exchange, Euronext Dublin and the Vienna Stock Exchange.
The Filer was an “SEC foreign issuer” under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102) and has relied on and complied with the exemptions from Canadian continuous disclosure requirements afforded to SEC foreign issuers under Part 4 of NI 71-102. On June 25, 2019, the Filer filed with the SEC an application to delist its ADRs from the NYSE, effective July 8, 2019. On July 9, 2019 the Filer filed with the U.S. Securities and Exchange Commission (the SEC) an application requesting the SEC to deregister all classes of its financial instruments. Deregistration became effective after a 90-day period from the filing date. The ADRs were deregistered on or around October 7, 2019.
The Filer retained IHS Markit (IHS), a provider of shareholder identification and analysis, to assist it in determining Canadian holdings of the Filer’s securities. Based on this investigation, the Filer has concluded there was the following ownership by Canadian residents of the Filer’s securities as of April 15, 2019:
ISIN/CUSIP
Number of Securities held by Canadian residents
% of Securities held by Canadian residents
IT0003497168 / T92778108 (Ordinary Shares)
36,691,560
0.24%
US87927Y1029 / 87927Y102 (Ordinary ADRs)
274,398 (corresponding to 2,743,980 Ordinary Shares)
1.23% (corresponding to 0.02% of the Ordinary Shares)
IT0003497184 / T92778124 (Registered Savings Shares)
0.00%
IT0003497176 (Bearer Savings Shares)
29,150,421
0.48%
US87927Y2019 / 87927Y201 (Savings ADRs)
665,342 (corresponding to 6,653,420 Savings Shares)
4.51% (corresponding to 0.11% of the Savings Shares)
XS0195160329 / T9277NAJ4 (Notes)
10,300,000
1.21%
XS0254907388 / T9277NAP0 (Notes)
0.00%
XS0486101024 / T9277NAY1 (Notes)
0.00%
XS0214965963 / T9277NAK1 (Notes)
0.00%
XS0974375130 / T92777AG5 (Notes)
110,000
0.02%
XS1020952435 / T92777AH3 (Notes)
115,000
0.02%
XS0868458653 / T92777AF7 (Notes)
851,000
0.12%
XS1935256369 / T9344YAB6 (Notes)
14,160,000
1.13%
XS1347748607 / T92777AL4 (Notes)
0.00%
XS1419869885 / T92777AM2 (Notes)
1,092,000
0.11%
XS1169832810 / T92777AJ9 (Notes)
450,000
0.05%
XS1497606365 / T92777AN0 (Notes)
400,000
0.04%
XS1846631049 / T9344YAA8 (Notes)
100,000
0.01%
XS1551678409 / T92777AP5 (Notes)
0.00%
XS1698218523 / T92777AQ3 (Notes)
400,000
0.03%
XS1209185161 / T92777AK6 (Notes)
0.00%
US87927YAA01 / 87927YAA0 (Notes)
5,056,000
0.34%
US87927YAB83 / 87927YAB8 (Notes)
0
0.00%
The analysis completed by IHS indicates that holdings of the Filer’s securities by Canadian residents are de minimis. Canadian residents hold less than 2% of the issued and outstanding securities for each class of the Filer’s securities. Many of the Filer’s classes of securities as detailed above have no Canadian resident holders.
According to the analysis performed by IHS, Canadian residents hold: (i) 0.59% of the total Savings Shares (including Savings Shares represented by ADRs); (ii) 0.26% of the total Ordinary Shares (including Ordinary Shares represented by ADRs); and (iii) 0.35% of the total Savings Shares and Ordinary Shares (including Savings Shares and Ordinary Shares represented by ADRs).
On the basis of the information set out above, the Filer believes that the number of its Canadian securityholders is de minimis. Issuers under Italian law do not operate real-time shareholders’ registers and rely on corporate actions to update share ownership. At the time of the application for the Order Sought, the Filer’s last relevant corporate action for its Savings Shares in 2018 and for its Ordinary Shares in 2013 indicated that the number of Canadian securityholders of Savings Shares and Ordinary Shares represented less than 2% of the total number of securityholders of Savings Shares and Ordinary Shares, respectively, of the Filer worldwide, at the time of the respective corporate action.
None of the Filer’s securities, including debt securities, are listed, quoted or traded on a marketplace or exchange in Canada.
In the 12 months before applying for this order, the Filer has not taken any steps that indicate there is a market for its securities in Canada, including conducting a prospectus offering in Canada, establishing or maintaining a listing on an exchange in Canada or having its securities traded on a marketplace in Canada.
The Filer has issued a news release on September 12, 2019 regarding the application it filed for the Order Sought, and has not received any complaints in response.
The Filer is not in default of securities legislation in any jurisdiction.
Upon granting of the Order Sought, the Filer will no longer be a reporting issuer in any jurisdiction in Canada.
Upon granting of the Order Sought, the Filer will deliver to its Canadian resident securityholders all disclosure it will be required to deliver to Italian resident securityholders under Italian securities laws or the rules of the BI.
Order
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
“Heather Zordel”
“Poonam Puri”
Commissioner Ontario Securities Commission
Commissioner Ontario Securities Commission