TIM to set to choose KKR for Open Fiber funding

TIM to set to choose KKR for Open Fiber funding

17 February 2020 | Natalie Bannerman

Cover

Telecom Italia (TIM) is reportedly set to pick private equity firm KKR to support it in its merger with Open Fiber.

According to sources speaking to Bloomberg, TIM was close to selecting KKR due to the company’s previous interest in investing in TIM’s secondary network, specifically the part that connects street cabinets to subscribers’ homes.

If said investment goes ahead, KKR could acquire a minority stake in TIM’s network valued at close to $7-8 billion, enabling the company to build its single nationwide network.

TIM has approached several infrastructure funds asking them to review a joint investment in the new fibre broadband entity it is trying to create by combining its fibre assets with that of Open Fiber. A source told Reuters that firms Ardian, Macquarie MAQ.AX, Wren House Infrastructure, Allianz ALVG.DE, Goldman Sachs GS.N, KKR and Brookfield BAMa.TO put forth non-binding proposal to work alongside TIM before Christmas.

Reports also claim that Francesco Starace, CEO of Entel said in a interview with German publication Borsen Zeitung, that he doesn’t plan on selling the company’s stake in Open Fiber however, another source says that the CDP is.

The news follows stalled talks between TIM, the owners of Open Fiber – Entel and state lender CDP when the European Court of Justice ruled against TIM’s appeal against the decision to award Open Fibre with a tender to build a nation broadband network.

The tender, launched by state-owned infrastructure firm Infratel, will be allowed to continue with Open Fiber, which, according to the EUCJ, maintained its “legal and material identity” as an economic operator during the pre-qualification phase.