Telecom Italia to sell Argentine unit
Telecom Italia will sell its Argentinean arm, as well as a number of other assets, as part of a strategy to raise roughly €4 billion.
The Italian operator will use the projected funds to prevent its credit rating being downgraded, and to strengthen its operations in Italy and Brazil, according to Reuters.
Franco Bernabè resigned from his position as CEO at the company in early October this year, and has been replaced by Marco Patuano, who has been working to shift Telecom Italia’s strategy and reduce its debt.
Patuano told reporters yesterday that it had received an unsolicited offer for its 22.7% stake in Telecom Argentina and that the company was planning to accept.
Local newspapers named investment fund Fintech – which already holds shares in the Argentinean firm – as the buyer.
Telecom Italia also plans to sell and lease back more than 17,000 of its mobile towers in Italy and Brazil, as well as shift an Italian digital broadcasting unit. The company hopes to bring in more than €2 billion from the combined sale.
Ratings firm Moody’s cut Telecom Italia’s rating last month and any further cuts will be costly to the company, which will have to roll over enormous debts next year.
“From our perspective as a rating agency, this is an immediately neutral move, and will be credit positive and strengthen the balance sheet only in year three when the bonds convert to equity,” Carlos Winzer, credit analyst at Moody’s, told Reuters.
Telecom Italia shareholders were discussing a potential restructure of the company in September this year.