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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
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(Rule 13d-101)
(Amendment No. 7)
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TELECOM ITALIA S.p.A.
(Name of Issuer)
Ordinary Shares of euro 0.55 par value each 87927W10
(Title of class of securities) (CUSIP number)
Alexander Rosenzweig, Esq.
Vice President and Chief Legal Officer
Pirelli North America, Inc.
246 Stoneridge Drive
Suite 400
Columbia, South Carolina 29210
(803) 951-1040
With a copy to:
Ellen J. Odoner, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
(Name, address and telephone number of person authorized
to receive notices and communications)
November 23, 2001
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
NY2:\1098112\06\NJB406!.DOC\67793.0060
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CUSIP No. 87927W10 13D Page 2 of 9
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1 NAME OF REPORTING PERSON PIRELLI S.p.A.
I.R.S. IDENTIFICATION NO. Not Applicable
OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: BK, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy
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7 SOLE VOTING POWER: 0
NUMBER OF
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 2,891,656,682
OWNED BY (See Item 5)
EACH ------------------- --------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER: 0
PERSON WITH
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10 SHARED DISPOSITIVE POWER: 2,891,656,682
(See Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,891,656,682
(See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 54.96%
(See Item 5)
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14 TYPE OF REPORTING PERSON: CO
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2
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CUSIP No. 87927W10 13D Page 3 of 9
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1 NAME OF REPORTING PERSON Olimpia S.p.A.
I.R.S. IDENTIFICATION NO. Not Applicable
OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy
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7 SOLE VOTING POWER: 0
NUMBER OF
SHARES
------------------- --------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: See Item 5
OWNED BY
EACH ------------------- --------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER: 0
PERSON WITH
------------------- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: See Item 5
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: See Item 5
------------------------ --------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
------------------------ --------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): See Item 5
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14 TYPE OF REPORTING PERSON: CO
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3
This Amendment No. 7 amends the Statement on Schedule 13D
dated August 9, 2001, as amended (as previously amended, the "Statement on
Schedule 13D"), filed by Pirelli S.p.A., a company incorporated under the laws
of the Republic of Italy ("Pirelli"), and, commencing with Amendment No. 1
thereto, Olimpia S.p.A., a company incorporated under the laws of the Republic
of Italy (the "Purchaser"), with respect to the ordinary shares, euro 0.55 par
value per share, of Telecom Italia S.p.A., a company incorporated under the laws
of the Republic of Italy. Capitalized terms used in this Amendment without
definition have the meanings ascribed to them in the Statement on Schedule 13D.
Pirelli, the Purchaser, Edizione Holding, UCI and BCI are
members of a group with respect to the Telecom Italia Shares. This Amendment
constitutes a separate filing on Schedule 13D by Pirelli and the Purchaser in
accordance with Rule 13d-1(k)(2) under the Securities Exchange Act of 1934.
Pirelli and the Purchaser are responsible solely for the information contained
in their separate filing, except that information contained in the Statement on
Schedule 13D concerning any director or officer of the Purchaser nominated by
Edizione Holding, UCI or BCI has been provided by the nominating person.
Item 3. Source and Amount of Funds or Other Consideration
On November 23, 2001, the Purchaser subscribed and paid for
504,825,563 Olivetti Shares and 504,825,562 Olivetti Convertible Bonds for an
aggregate purchase price of euro 1,009,651,125 (comprised of euro 1.00 for each
Olivetti Share and Olivetti Convertible Bond) in connection with the Olivetti
rights offering described in Item 4 of Amendment No. 5 to the Statement on
Schedule 13D. The Purchaser obtained approximately euro 985,000,000 of the
necessary funds from a loan made under the Revolving Credit Agreement (which is
described in Item 3 of Amendment No. 6 to the Statement on Schedule 13D). The
balance of the funds were obtained by the Purchaser from a portion of a loan
made on November 23, 2001 under a credit agreement, dated as of November 14,
2001 (the "Banca di Roma Credit Agreement"), between the Purchaser and Banca di
Roma S.p.A. ("Banca di Roma"). The Banca di Roma Credit Agreement provides to
the Purchaser an unsecured revolving credit facility in an aggregate principal
amount of euro 250,000,000 for a period of 6 months. Funds borrowed thereunder
bear interest at an annual rate of Euribor plus a margin of 0.5% per annum. A
copy of the Banca di Roma Credit Agreement is filed as Exhibit 26. The Purchaser
also used euro 25,619,985 of proceeds from the loan made under the Banca di Roma
Credit Agreement to repay all amounts outstanding (including interest) under the
bridge loan that it received from Pirelli on October 31, 2001 (which is
described in Item 3 of Amendment No. 6 to the Statement on Schedule 13D).
On November 20, 2001, MPS subscribed and paid for 25,000 bonds
(the "MPS Bonds") issued by the Purchaser in the aggregate principal amount of
euro 250,000,000. (The Purchaser's intention to issue the MPS Bonds was reported
in Item 3 of Amendment No. 3 to the Statement on Schedule 13D.) The Purchaser
used the proceeds from the issue of the MPS Bonds to repay all amounts
outstanding (including interest) under the loan that it received from Mediobanca
on October 31, 2001 (which is described in Item 3 of Amendment No. 6 to the
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Statement on Schedule 13D). The MPS Bonds will mature on November 20, 2006 and
bear interest at a compounded annual rate of 3%, payable at maturity. Each MPS
Bond has a nominal value of euro 10,000 and is convertible at maturity at the
election of the bondholder into 1,610 TIM Shares (subject to certain
anti-dilution adjustments). If the reference price of TIM Shares on the Italian
stock exchange is equal to, or higher than, euro 15.80 on any trading day on or
before September 29, 2006, then the Purchaser must pay to the holders of MPS
Bonds an amount equal to euro 10,225.50 for each MPS Bond held. The conversion
feature of the MPS Bonds will terminate upon such payment. Prior to maturity,
MPS Bonds may be redeemed at the election of the bondholder upon the occurrence
of any of certain events, including (and subject to certain exceptions): (i) if
Pirelli and/or Edizione Finance cease to be in a position to, directly or
indirectly, control the Purchaser (whether jointly or individually) or (ii) if
the Purchaser ceases to hold at least 20% of the outstanding capital of
Olivetti. A copy of the instrument governing the MPS Bonds is filed as Exhibit
27.
Item 5. Interest in Securities of the Issuer
(a) After giving effect to the Purchaser's acquisition of
504,825,563 Olivetti Shares and 504,825,562 Olivetti Convertible Bonds (each of
which is convertible into one Olivetti Share at any time during the period
between January 22, 2002 and December 15, 2009) in connection with the Olivetti
rights offering, the Purchaser directly holds 2,524,127,813 Olivetti Shares,
504,825,562 Olivetti Convertible Bonds and 68,409,125 Olivetti Warrants. In
addition, after giving effect to the transactions described in paragraph (c)
below, the Purchaser has the right to acquire a further 263,500,000 Olivetti
Shares, and Pirelli has the right to acquire a further 300,000,000 Olivetti
Convertible Bonds or Olivetti Shares. Information concerning the Purchaser's
proportional holding of Olivetti's total outstanding voting capital will be
filed by amendment after Olivetti files with the Italian companies register the
respective numbers of Olivetti Shares and Olivetti Convertible Bonds outstanding
after giving effect to the rights issue.
(c) On November 16, 2001, the Purchaser entered into an equity
swap transaction with Caboto Holding SIM S.p.A. ("Caboto"), pursuant to which
Caboto agreed to pay to the Purchaser an amount equal to any increase, and the
Purchaser agreed to pay to Caboto an amount equal to any decrease, in the
official market price of 131,750,000 Olivetti Shares (the "Caboto Swap Shares")
above or below a reference price of euro 1.36881 per share during the period
between November 30, 2001 and October 5, 2007, or such earlier date of which the
Purchaser provides eight calendar days' notice to Caboto (the "Caboto Swap
Period"). At the expiration of the Caboto Swap Period, the Purchaser may require
Caboto to deliver (or to procure that a third party delivers) all or any of the
Caboto Swap Shares to the Purchaser upon payment by the Purchaser of an amount
per share equal to the average official market price of Olivetti Shares over the
three business days preceding the expiration of the Caboto Swap Period. The
Purchaser is required to pay to Caboto on November 30, 2001 a fee in an amount
equal to 32% of the value of the Caboto Swap Shares (assuming a price per share
of euro 1.36881). Caboto is required to pay to the Purchaser an amount equal to
the aggregate amount of all dividends paid on the Caboto Swap Shares during the
Caboto Swap Period. A copy of a term sheet setting forth the principal terms of
the transaction is filed as Exhibit 28.
5
On November 23, 2001, the Purchaser entered into a separate
equity swap transaction with UBM, pursuant to which UBM agreed to pay to the
Purchaser an amount equal to any increase, and the Purchaser agreed to pay to
UBM an amount equal to any decrease, in the official market price of 131,750,000
Olivetti Shares (the "UBM Swap Shares") above or below a reference price of euro
1.3686 per share during the period between November 30, 2001 and October 5,
2007, or such earlier date of which the Purchaser provides 12 days' notice to
UBM (the "UBM Swap Period"). At the expiration of the UBM Swap Period, the
Purchaser may require UBM to deliver (or to procure that a third party delivers)
all or any of the UBM Swap Shares to the Purchaser upon payment by the Purchaser
of an amount per share equal to the average official market price of Olivetti
Shares over the period of seven business days prior to and including November 1,
2007 (or, in the event of early termination, the period of seven business days
following receipt by UBM of notice of early termination). The Purchaser is
required to pay to UBM on November 30, 2001 a fee in an amount equal to 31.87%
of the value of the UBM Swap Shares (assuming a price per share of euro 1.3686).
UBM is required to pay to the Purchaser an amount equal to the aggregate amount
of all dividends paid on the UBM Swap Shares during the UBM Swap Period, net of
any applicable withholding taxes. A copy of a letter agreement setting forth the
principal terms of the transaction is filed as Exhibit 29.
On November 7, 2001, Pirelli purchased from Morgan Guaranty
Trust Company of New York ("MGT") a call option (the "MGT Option") with respect
to 100,000,000 Olivetti Shares or Olivetti Convertible Bonds. The MGT Option may
be exercised by Pirelli in whole or in part at any time during the period
commencing 60 calendar days after November 23, 2001 and ending 45 calendar days
prior to October 5, 2007 for an exercise price of euro 1.00 per Olivetti Share
or Olivetti Convertible Bond. Pirelli may require that the MGT Option be settled
in cash. Pirelli paid euro 28,100,000 to MGT in consideration for the MGT Option
and is also required to pay an annual fee during the term of the MGT Option. A
copy of a term sheet setting forth the principal terms of the MGT Option is
filed as Exhibit 30.
On November 14, 2001, Pirelli entered into a swap transaction
with Credit Agricole Lazard Financial Products Bank ("CALFP") with respect to
200,000,000 Olivetti Convertible Bonds. The swap transaction may be settled, at
Pirelli's option, either in cash or by physical delivery of Olivetti Convertible
Bonds or Olivetti Shares. If Pirelli elects to settle the swap transaction by
physical delivery, then it may require CALFP to deliver to it 200,000,000
Olivetti Convertible Bonds or Olivetti Shares on November 23, 2006 (or such
earlier date, not to precede January 22, 2002, of which Pirelli provides 10
business days' notice to CALFP) upon payment by Pirelli of an amount of euro
1.00 per Olivetti Convertible Bond or Olivetti Share. On November 27, 2001,
Pirelli paid a fee to CALFP in an amount of approximately euro 69,000,000.
During the term of the transaction, Pirelli is required to pay an annual fee to
CALFP, and CALFP is required to pay to Pirelli all interest received on the
Olivetti Convertible Bonds, net of any applicable withholding taxes. A copy of a
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term sheet that records the principal terms of the transaction is filed as
Exhibit 31.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Information contained in Item 5(c) of this Amendment No. 7 to
the Statement on Schedule 13D is incorporated herein by reference.
Item 7. Material to be Filed as Exhibits
26. Credit Agreement, dated as of November 14, 2001, between
the Purchaser and Banca di Roma S.p.A. [English translation]
27. Regulations of the Bond Loan Olimpia S.p.A. 3% 2001 - 2006
Convertible into Common Shares of Telecom Italia Mobile S.p.A. [English
translation]
28. Summary of Terms of equity swap transaction with respect
to 131,750,000 Olivetti Shares between the Purchaser and Caboto.
29. Letter Agreement, dated as of November 20, 2001, between
the Purchaser and UBM.
30. Indicative Terms and Conditions of American OTC Call
Option with respect to 100,000,000 Olivetti Shares or Olivetti Convertible Bonds
granted by MGT to Pirelli.
31. Final Terms and Conditions of Convertible Bond Asset Swap
with respect to 200,000,000 Olivetti Convertible Bonds between Pirelli and
CALFP.
7
SIGNATURE
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After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Date: November 28, 2001
PIRELLI S.p.A.
By: /s/ Anna Chiara Svelto
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Name: Anna Chiara Svelto
Title: Attorney-in-fact
OLIMPIA S.p.A.
By: /s/ Luciano Gobbi
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Name: Luciano Gobbi
Title: Director and Attorney-in-fact
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EXHIBIT INDEX
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26. Credit Agreement, dated as of November 14, 2001, between the Purchaser
and Banca di Roma S.p.A. [English translation]
27. Regulations of the Bond Loan Olimpia S.p.A. 3% 2001 - 2006 Convertible
into Common Shares of Telecom Italia Mobile S.p.A. [English
translation]
28. Summary of Terms of equity swap transaction with respect to 131,750,000
Olivetti Shares between the Purchaser and Caboto.
29. Letter Agreement, dated as of November 20, 2001, between the Purchaser
and UBM.
30. Indicative Terms and Conditions of American OTC Call Option with
respect to 100,000,000 Olivetti Shares or Olivetti Convertible Bonds
granted by MGT to Pirelli.
31. Final Terms and Conditions of Convertible Bond Asset Swap with respect
to 200,000,000 Olivetti Convertible Bonds between Pirelli and CALFP.
9