Verso una riforma delle regole della finanza d'impresa

We use the standard modern corporate finance theory to review the rules of the Italian company law related to three areas of firms' financial management: the decision to buy back shares, the decision on the method to raise new equity capital, and the decision on the method to raise new debt capital. We show that Italian company law makes share repurchase very difficult when the objective of this operation is to reduce the equity capital and return free cash flows back to shareholders. We also show that the Italian regulation favors rights issues, as opposed to public (underwritten) offers, and bank debt, as opposed to bond issues. All these three features of the Italian law have, however, very week, if any, economic justifications, even in terms of minority shareholders or creditors protection. We propose some remedies and highlight how the scope for reform is constrained by current EU directives on company law.