Telecom Italia (TI) plans to terminate a proposed spin-off of its wireline network, removing a significant option to raise funds for debt reduction from the table, three people familiar with the matter have told Bloomberg. As such, the company intends to use its 7 November board meeting to withdraw the plan, which was formally approved by directors in May.
The spin-off plan had been championed by recently-resigned CEO Franco Bernabe, who quit earlier this month after clashing with the board over strategic decisions. As previously reported by TeleGeography’s CommsUpdate, last month existing shareholder Telefonica of Spain agreed to gradually increase its influence in TI through a series of deals relating to holding company Telco. The Madrid-based firm is said to be keen to arrest TI’s domestic slump without disposing off the fixed line grid.