Telecom Italia has reportedly hired Morgan Stanley to explore sale options for its Brazilian subsidiary’s tower portfolio.
The Italian incumbent plans to sell TIM Brasil’s 7,000 towers next year alongside its 10,000-plus domestic sites and cinema…
Telecom Italia has reportedly hired Morgan Stanley to explore sale options for its Brazilian subsidiary’s tower portfolio.
The Italian incumbent plans to sell TIM Brasil’s 7,000 towers next year alongside its 10,000-plus domestic sites and cinema multiplexes in a bid to shrink its net debt.
In TI’s Q3 conference call, CEO Marco Patuano said these sales would together raise around €2bn (US$2.7bn). The Brazilian towers could make up around €700m (US$952m) of that figure, according to Bloomberg citing a person familiar with the matter.
In September TIM’s rival Oi sold just over 2,000 towers to BR Towers for US$211m following the sale of a similar portfolio to SBA Communications earlier in the year for US$304m. Meanwhile American Tower is close to acquiring 2,800 Nextel Brazil towers for US$413m.
American Tower is also linked to TIM’s portfolio in the Bloomberg report. Abertis could be another potential bidder; in September its CFO Jose Aljaro was quoted saying the Spanish infrastructure group was analysing any towers that came on to the market in Brazil.
Operators in the country have been looking to sell off their infrastructure to raise funds for the rollout of 4G technology. The government has obliged telcos to deploy LTE in time for its two upcoming showpiece events, the 2014 World Cup and the 2016 Rio Olympics, as part of its latest spectrum licences.
Cade weighs in on Telefonica/TI
Elsewhere, Brazil’s antitrust regulator Cade is reportedly set to impose a R$15m (US$6.5m) fine on Telefonica for breaking an agreement with the authority by raising its stake in Telco – TI’s controlling shareholder.
In 2010 Telefonica had pledged not to increase its holding in the Italian telco. But two months ago, the Spanish incumbent reached a deal with the other Telco shareholders to incrementally raise its holding in the vehicle.
Telefonica has the option to take a majority in Telco. But earlier this month, its CEO said it did not intend to exercise the call and did not plan to own more than 49% of the vehicle.
Should Telefonica take control of TI, this would present an issue for Cade. This is because Telefonica’s Vivo unit and TIM are direct competitors in the Brazilian mobile market and together serve more than 50% of the country’s wireless subscribers.
However, it has been widely reported that Telefonica is in favour of TI selling TIM. The asset has been performing well in the Brazilian market and its share price has risen more than 23% since the start of the year. TIM, in which TI has a 67% stake, has a market capitalisation of around US$11.75bn. In October TI was reported as wanting US$12bn for its shares in TIM.
