Telecom Italia spoke about interests of investors
2022.12.09 05:55
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Telecom Italia spoke about interests of investors
Budrigannews.com – (BIT:) Telecom Italia TIM) is looking into whether investors might be interested in buying into its assets, sources who are familiar with the situation said on Friday. This is happening as officials from Italy’s right-wing government try to come to an agreement on how to fix the debt-ridden company’s problems.
Last month, the government of Italy said that it would try to find “the best market-friendly options” for the struggling TIM by the end of the year. This meant that state lender CDP’s planned bid for the phone group’s grid was put on hold.
The CEO Pietro Labriola’s strategy to break up TIM into several units and reduce the company’s 25 billion euros ($26.4 billion) debt was centered on the rumored multi-billion deal, which was part of a larger project to create a unified Italian network company with CDP’s broadband unit Open Fiber.
Labriola wants to be ready for whatever comes out of the government talks. Three people who are familiar with the situation told Reuters that the executive has recently been working specifically with the American fund KKR. According to the sources, the U.S. fund, which already owns a stake in TIM’s last-mile network and had an attempt to take over TIM as a whole rejected this year, has renewed interest in enforcing its control over TIM’s landline grid.
According to the individuals, TIM has also been in contact with other potential investors who are interested in purchasing its domestic service operations, such as the Poste Italiane and the French telecoms group Iliad.
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Under the “golden power” regulation, which gives Rome the ability to block the transaction, any deal involving TIM assets and foreign investors will be subject to government scrutiny.
At least two potential buyers have expressed interest in TIM SA, the company’s Brazil-listed subsidiary. However, the sources say that Labriola thinks that selling a unit that makes about 30% of the group’s core profit could hurt TIM’s credit rating unless it is offered at a higher price. Poste, Iliad, Telecom Italia, and KKR all declined to comment.
Within the administration of Prime Minister Giorgia Meloni, the topic of discussion is how to acquire control of TIM’s prized landline grid, a strategic asset. The government has not yet begun negotiations with TIM’s stakeholders, including Vivendi (OTC:), a major investor.
For TIM, which has been under pressure for years in its fiercely competitive domestic market and has been hit by multiple credit rating downgrades into junk territory over the past year, raising cash to cut debt and strengthen its finances is essential.
