Telecom Italia: Singer assertions groundless

02/06/2001 - 00:00 PM

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Telecom Italia states that the assertions made by Liverpool Ltd fund representative Mr Gordon Singer, concerning the alleged illegality of the conversion of Telecom savings shares and subsequent buy-back of ordinary shares, are completely groundless.

First, savings share privileges are, exclusively, receipt of a higher, guaranteed dividend (provided profits exist) and preferential repayment of capital in case of liquidation.

Second, a buy-back of ordinary shares does not juridically constitute either a distribution of dividends or a distribution of capital. It is an investment operation that has repercussions on the balance sheet, to the benefit of all shareholders in proportion, and which gives rise to an increase in income per distributable share.