Unicredit's Board of Directors today approved some actions to strengthen its corporate governance and simplify the Bank's share capital structure. The institute announced it in a note, explaining that the related statutory amendments are subject to approval by the shareholders' meeting and will be submitted to the extraordinary shareholders' meeting convened for 4 December 2017.
The resolutions approved by the Board are four:
1. attribution to the Board of Directors of the right to present its own list of candidates for the office of director and increase in the number of directors taken from the minority list;
2. elimination of the 5% limit on the exercise of voting rights;
3. mandatory conversion of savings shares into ordinary shares;
4. transfer of the registered office from Rome to Milan.
The resolutions concerning the mandatory conversion of savings shares into ordinary shares will also be submitted to the approval of the Special Meeting of savings shareholders to be held on the same day, 4 December 2017.
These actions are mainly aimed at improving and simplifying Unicredit's corporate governance structure, aligning the latter with best practices, as well as simplifying the share capital structure.
The notice calling the shareholders' meetings will be published in the next few days together with the reports on the items on the agenda, within the terms and in the manner prescribed by law.
The Board also resolved to start making contacts with the Polish authorities and market management companies in order to verify the feasibility in Poland of the withdrawal of ordinary shares from trading on the Warsaw Stock Exchange.
MANDATORY CONVERSION OF SAVINGS SHARES INTO ORDINARY SHARES
In particular, the proposal for the mandatory conversion of the current 252.489 savings shares into ordinary shares and the consequent amendments to the Articles of Association contributes to the pursuit of the objective of achieving a general simplification of the capital structure, with consequent cost savings.
The conversion ratio was established by the BoD as follows: for each savings share subject to conversion, 3,82 ordinary shares with regular entitlement, plus an adjustment equal to 27,25 euro, attributing newly issued shares and/or treasury shares and, in any case, without any change in the value of the share capital.
The conversion of savings shares into ordinary shares, affecting the rights of savings shareholders, will be submitted not only to the extraordinary meeting of ordinary shareholders, but also to the special meeting of the category and will involve the recognition of the right of withdrawal to savings shareholders , to be exercised according to the provisions of the law.
The liquidation value in relation to the savings shares subject to withdrawal will be determined by making reference to the arithmetic mean of the closing prices in the six months preceding the publication of the notice calling the Shareholders' Meeting whose resolutions legitimize the withdrawal pursuant to art. . 2437-bis of the civil code and, therefore, will be calculated on that date.
NEW RISK MANAGEMENT STRUCTURE
Unicredit also announced that the Board has approved the proposed modification of the organizational structure of risk management and credit activities of the group to further strengthen the effectiveness of risk controls, improve the focus of risk organization and strengthen control selective of the operating business.
In particular, Unicredit will separate risk management functions from individual lending operations. The new organizational structure, which will enter into force on 2017 October XNUMX, divides the Group's Risk Management activities into two organizational areas: Group Risk Management (GRM) and Group Lending Office (GLO), which will have specific and separate responsibilities.
GRM, will be led by TJ Lim, Group Chief Risk Officer (Group CRO), who will be in charge of Group-wide risk management, including risk management policies and guidelines, risk limits, development of risk assessment models and methodologies, the coordination and management of the validation activities of the risk measurement systems and, in particular, of the governance and control of the Risk Appetite Framework (“RAF”), of the risk assessment process capital adequacy (“ICAAP”) and the management of financial, operational and reputational risks.
GRM will also retain responsibility for defining strategy and overseeing implementation, guiding and directing the management and sale of non-performing exposures (“NPE”).
GLO, will be led by Andrea Varese, Chief Lending Officer (CLO), who will oversee lending activities, in compliance with risk management strategies, and will develop lending policies and guidelines, including disbursement, restructuring and credit recovery.
Both areas will report directly to Jean Pierre Mustier, Chief Executive Officer, and the new Group CRO and CLO will become members of the group executive management committee. Following the reorganization of UniCredit's risk management structure, Massimiliano Fossati will step down as CRO. Massimiliano Fossati will leave the group.
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