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Brazil's TIM may benefit from Telecom Italia's network sale

Published 06/13/2024, 04:21 PM
Updated 06/13/2024, 04:26 PM
© Reuters. FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo

By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - The chief executive of TIM Brasil, Alberto Griselli, said on Thursday that its parent company Telecom Italia (BIT:TLIT)'s agreement to sell its physical network could provide an additional boost for its business in Brazil.

"Brazil is the group's priority; the crown jewel," he told Reuters on the outskirts of an innovation and technology event in Rio de Janeiro. 

TIM Brasil is Telecom Italia's main business, generating around 35% of its earnings before interest, taxes, depreciation and amortization, a percentage that will increase, according to Griselli, after U.S. investment firm KKR obtained in late May EU approval to buy Telecom Italia's fixed-line network.

TIM invests an average of 4.5 billion reais ($837.8 million) in Brazil every year and, with the possibility of having fewer restrictions from its parent company, it could have more room to invest.

"The sale overseas makes our controller deleverage; as they deleverage, we have more flexibility in our capital structure here and thus more room for maneuver," said Griselli.

© Reuters. FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo

On Wednesday, Moody's (NYSE:MCO) raised Telecom Italia's credit rating to Ba3 and maintained a positive outlook following the deal's antitrust approval.

($1 = 5.3713 reais)

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