First ever sanction of a Scheme of Arrangement of an Italian company

On 16 August 2012 the High Court granted an order sanctioning a Scheme of Arrangement proposed by  Seat Pagine Gialle SPA, an Italian listed entity whose centre of main interests, or “COMI”, is in Italy.  This is the first ever Scheme of an Italian company.  Linklaters LLP, instructing William Trower QC and  Adam Goodison of 3/4 South Square, acted on behalf of Seat.  This case, which addressed a number of technical issues concerning the application of Council Regulation (EC) No 44/2001 on Jurisdiction and Enforcement of Judgments, once again demonstrates the potential use of Schemes as implementation tools in complex cross border debt restructurings where foreign companies wish to restructure liabilities governed by English law.

Seat operates a business providing highly innovative multi media, print and online directories assistance and search services.  It is the largest provider of print and online directories in Italy and operates business in two other jurisdictions, Thompson Directories in England and Telegate in Germany.  It employs over 3,000 people worldwide and had consolidated revenues of over €961m in 2011.

The Scheme, under which Seat's senior debt will be refinanced, is part of a larger cross border and cross product restructuring involving three separate classes of creditor as well as certain existing shareholders.  The restructuring will also involve  an equitisation of subordinated bonds issued by an “orphan” financing special purpose vehicle, as part of which  the orphan SPV's COMI  was moved to England prior to the SPV being put into administration.  The restructuring is ongoing.

Seat is the latest foreign company to avail itself of an English law Scheme in order to restructure its financial liabilities. Others include Rodenstock and Primacom (German), La Seda and Metrovacesa (Spanish) and British Vita and Wind Hellas (Luxembourg).  However, this is the first time that a Scheme has been sanctioned in respect of an Italian company.

If you have any questions regarding this alert, please contact Francesco Faldi, Karen McMaster or your usual Linklaters contact.