Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Italy's TIM aims to maximise value and cut debt in break-up

Stock Markets Jun 05, 2022 11:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Telecom Italia (TIM) General Manager Pietro Labriola poses for a portrait at the company's headquarters in Rome, Italy, January 17, 2022. REUTERS/Guglielmo Mangiapane/File Photo

By Francesca Landini and Elvira Pollina

TRENTO, Italy (Reuters) -Telecom Italia (TIM) will pursue a plan to split its landline network from its service operations to maximise asset value for all shareholders and cut its debt pile, the head of the company said on Sunday.

Under pressure for years in its fiercely competitive domestic market, Italy's former phone monopoly is seeking to revamp its business via a separation of its domestic fixed network assets to focus on consumer and commercial activities.

As part of a preliminary pact sealed with Italian state lender CDP last week, TIM's network assets would be combined with those of state-backed broadband rival Open Fiber to create a single national network company majority-owned by CDP.

The new network entity would take up a significant portion of TIM's debt and domestic staff.

But TIM's top investor Vivendi (OTC:VIVHY), whose support is key for any deal to go through, has said it would be ready to evaluate other opportunities if the network value is not recognised in the single broadband plan.

"The most important thing is to maximise the value of all assets in the interest of all shareholders," Telecom CEO Pietro Labriola said in response to a question over whether the French media giant stance could hamper the project.

CDP, which is TIM's second-largest investor with a 10% stake, also owns 60% of Open Fiber.

Speaking at an economic event in Trento in northern Italy, Labriola declined to say whether TIM was considering a full exit from its landline network business with an outright sale.

He underscored that any spin-off would be designed to cut TIM's 23 billion euro ($25 billion) net debt.

"It seems to me that all parties (involved in the single network project) are interested in understanding quickly enough if the plan is feasible," Labriola said, adding the creation of a single fiber network could be completed in 12-18 months.

THREE-YEAR PLAN

A veteran in the telecoms sector, Labriola, who took the helm of the company in January, is due to present a three-year business plan on July 7 which will be focused on the break-up of TIM's operations.

Rome is keen to create a national wholesale network champion independent from any broadband service provider, seen as a way to speed-up fiber rollout and avoid the costly duplication of investment and help the digitalisation of the economy.

The success of such a plan will depend on "goodwill of foreign investors", including Vivendi, and infrastructure funds holding minority stakes in Open Fiber and TIM's grid, Italy's Innovation Minister Vittorio Colao acknowledged on Sunday.

KKR came round to joining the TIM-CDP project after TIM spurned a 10.8 billion euro proposal by the U.S. fund to gain control of TIM and delist it before splitting its fixed and services assets.

But sources have said it still has reservations on the deal.

Crucially, any combination of TIM's network assets with those of Open Fiber would need to win regulatory approval as it would recreate a near monopoly.

"Ideally, we would love to have infrastructural competition, but at this stage Italy seems not able to afford it", said Colao, a former Vodafone (NASDAQ:VOD) boss, speaking at the same event in Trento.

($1 = 0.9330 euros)

Italy's TIM aims to maximise value and cut debt in break-up
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email