By Giuseppe Fonte
ROME (Reuters) – Italy is readying measures to address the issues holding back the country’s capital markets and reinforce the role of the 200-year-old Borsa Italiana, according to government officials and a draft bill seen by Reuters on Monday.
With an overall capitalisation of around 680 billion euros ($726.3 billion), the value of companies listed on Milan’s bourse lags far behind European Union peers.
Last year 15 companies abandoned Euronext Milan, including the infrastructure group Atlantia and Agnelli family’s holding company Exor, with six newcomers to compensate for exits.
Some of those which delisted were drawn to other bourses, notably Amsterdam, where regulations help leading shareholders to preserve a tight grip on companies.
Adding to the challenge, Italy’s family-run businesses are unwilling to relinquish control by listing unless they need cash for M&A or other expansion strategies.
“We aim to present a bill in parliament by April to strengthen Milan’s ability to encourage listing,” Treasury junior minister Federico Freni told Reuters.
Prime Minister Giorgia Meloni’s government plans to adopt some proposals studied under the previous administration led by Mario Draghi, Freni added without giving details.
To boost initial public offerings (IPOs) in Milan, the draft bill includes measures to simplify the listing process, which current rules companies say make it costly and cumbersome to provide adequate risk disclosure for investors.
EASING SELF-PLACEMENT
Rome could also allow a wide range of firms to benefit from the simplifications and incentives already provided for small and medium-sized enterprises (SMEs) which plan to list.
“SME qualification is currently envisaged when capitalisation does not exceed 500 million euros: such a threshold would be increased to 1 billion euros,” the draft showed.
A further measure would scrap a provision designed to protect savers that holds staff of regulators such as market watchdog Consob liable for damages. This would make only the institution liable while shielding its employees including top executives, a move the Treasury believes could speed up the listing process.
The bill also proposes restricting the liability of listing companies to cases of serious misconduct that damage investor interests due to information included in the IPO documents.
In addition, the scheme reinforces the possibility of bypassing the formal IPO process through a so-called self-placement, which sees a company sell shares directly, saving the money required to line up underwriters as middlemen.
As part of a drive to boost funding sources other than bank credit, a measure being discussed would allow companies to issue bonds for an amount exceeding the current limit of twice the share capital, provided that these notes were bought by professional investors.
($1 = 0.9362 euros)
(Reporting by Giuseppe Fonte in Rome, additional reporting by Elisa Anzolin in Milan; Editing by Emelia Sithole-Matarise)