TIM investor Merlyn offers plan to cut debt

TIM investor Merlyn offers plan to cut debt

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Telecom Italia would be left with US$7 billion in cash after repaying its debts if it sold its Brazilian unit and its domestic consumer business according to activity investor Merlyn Partners.

In a document that outlines its vision for TIM, Merlyn – which holds a minority 0.5% of the group drew up six scenarios ahead of a shareholder vote to name new top executives at the company which will take place on April 23.

A Reuters report says four of the six scenarios are built around the proposed sale of TIM’s domestic access network to KKR, an up to €22 billion deal promoted by TIM CEO Pietro Labriola.

In its report, Merlyn examined the possibility of retaining the fixed line network, while selling the domestic consumer business and TIM SA.

That plan “offers an alternative path for TIM” and according to the report “addresses any contingent scenario to make sure that the much-needed deleveraging of TIM happens as soon as possible”.

Labriola is seeking reappointment but has come under pressure in recent weeks after a record stock plunge for the Group.

Merlyn is challenging the reappointment and believes TIM should focus on offering high-value connectivity and digital services to big corporate clients and public administration customers.

"This transformation will be executed by immediately divesting from non-core operations such as TIM Brasil already in 2024 and businesses lacking competitive advantages such as TIM Consumer by mid-2025," the document stated.

Bluebell Capital Partners, another investor has also proposed its own slate of candidates to TIM’s board of directors.

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