Benetton considers Telecom Italia future

30 Jul 2008

A major Telecom Italia shareholder has hinted that the telco could be forced to seek fresh funds from investors as it looks to pay back debt or to finance a more aggressive expansion strategy. Gilberto Benetton, whose family has an indirect stake in Telecom Italia via the Telco consortium which also involves Telefonica, told local newspaper Il Sole 24 Ore: ‘Sooner or later Telecom will have to raise capital and at that moment, we can decide whether to subscribe, and so decide whether to dilute our stake.’ The statement has seen share prices fall by 4% in early trading on Wednesday. A report from Reuters says that Benetton may even opt to exit Telecom Italia completely over concerns about the company’s future strategy: ‘If we are not satisfied, we will leave,’ Benetton said. ‘We have faith in the new management … (but) we think that without a real industrial shock, the company cannot sort itself out,’ he added. Telecom Italia CEO Franco Bernabe has proposed a fairly conservative strategy while the telco works to reduce debt, but some shareholders worry that it faces being marginalised while players such as Telefonica continue to grow their international presence.

Italy, Telecom Italia (TIM)