Italy

New opportunities for asset segregation

Filippo Emanuele, Richard Hamilton and Paolo Salimei, Clifford Chance Studio Legale Associato, Italy

A major overhaul of Italian company law will come into force on 1 January 2004. Among the most innovative changes are the provisions which offer new opportunities for asset segregation and limited recourse financing of a specific business activity of a company, which may also be used in the context of securities issues. Under the new rules, a joint stock company ( società per azioni ) may either create a segregated pool of assets designated for a specific business activity (a designated pool of assets or asset pool) or enter into agreements for the financing of a specific business activity (specific business limited recourse financing), by which the financing is repaid either wholly or partly from the cash flows deriving from that activity.The aim of these provisions is to allow the segregation of a company’s assets without having to transfer them to a separate legal entity, as is currently the case under Italian law.