TI considering selling 30% of network to lender

23 Apr 2013

As part of its exploration of a separation if its fixed line assets, Telecom Italia (TI) is said to be considering a sale of an initial 30% in a new company to state lender Cassa Depositi e Prestiti (CDP). Two people familiar with the matter told Bloomberg that the carrier seeks to transfer as much as EUR10 billion (USD13.1 billion) in debt to the new company, which will own the fixed line network, and be required to invest around EUR2 billion on an annual basis. However, the telco may let Rome-based CDP increase its holding over time. TI’s board is scheduled to meet on 8 May to discuss the spinoff scheme, as the Milan-based telco separately explores the feasibility of a merger with Hutchison Whampoa’s 3 Italia mobile unit.

Hutchison was forced to deny that it was interested in TI’s fixed assets after a number of Italian politicians voiced their opposition to the idea of a foreign company owning the country’s PSTN, which is considered a strategic national asset over which the Treasury has veto powers. Bloomberg’s sources note that, by setting the structural separation into motion before a potential combination with Hutchison, TI could potentially shorten the regulatory review required – if and when a deal is reached.

Italy, 3 Italia (H3G Italia), CK Hutchison, Telecom Italia (TIM)