The proceeds would allow the former phone monopoly to cut its multi-billion dollar debt pile. (File pic - Telecom Italia HQ)
MILAN: Telecom Italia SpA is seeking a valuation of around 20bil (US$21.5bil or RM94bil) for the landline network it plans to sell to a state lender and international funds, according to people with knowledge of the matter.
The proceeds would allow the former phone monopoly to cut its multi-billion dollar debt pile, accelerating chief executive officer Pietro Labriola’s turnaround plan, said the people, who asked not to be named because the internal calculation isn’t public.
The valuation is preliminary and could change, they added. A spokesman for Telecom Italia couldn’t be reached for comment.
Telecom Italia announced over the weekend that it’s preparing to sell off the entirety of its network in a plan that would shift control of the asset to the Italian state.
The phone carrier said it reached a preliminary, non-binding accord with state lender Cassa Depositi e Prestiti SpA (CDP), which serves as the government’s financial arm, to combine its grid with a similar network owned by smaller rival Open Fiber SpA, which is controlled by CDP.
Telecom Italia TIM
The accord was also signed by Open Fiber and Teemco, a Luxembourg company controlled by US private equity firm Kohlberg Kravis Roberts & Co (KKR), which owns a stake in Telecom Italia’s FiberCop SpA fiber unit. Macquarie Group Ltd, a minority investor in Open Fiber, also signed the deal.
The news marks the end of an era for the carrier, which was privatised in 1997 and has struggled with financing for decades. — Bloomberg
