Telecom Italia (TI) has appointed Aldo Minucci as chairman of its board of directors as it advances plans for Brazilian unit TIM Brasil and cancels its planned €3bn (US$4.07bn) hybrid bond offering.
Previously vice chairman of the board, Minucci took…
Telecom Italia (TI) has appointed Aldo Minucci as chairman of its board of directors as it advances plans for Brazilian unit TIM Brasil and cancels its planned €3bn (US$4.07bn) hybrid bond offering.
Previously vice chairman of the board, Minucci took on the role of acting chairman when former CEO and chairman Franco Bernabe stepped down last October.
His appointment will not affect “the existing powers vested in the CEO, Marco Patuano”, the Milan-based telco said in a statement.
Plans for TIM Brasil
At yesterday’s meeting the board also approved suggestions by the management how it should handle any extraordinary transactions involving its 67% stake in TIM Brasil.
“The procedure meets the highest standards of governance and regulates the investigation and decision-making process for any transaction that may result in the transfer to any [other] entity … of its holdings in the Tim Brasil Group,” the incumbent said.
This procedure will also apply to other potential deals involving assets valued at more than €2bn (US$2.7bn).
In addition, the board asked management to draw up a proposal on how to evolve the company’s corporate governance to align it with best practice. This resulted from an internal benchmarking analysis comparing corporate governance at TI with that at other large, listed Italian and other European companies.
The new proposal will be examined at a board meeting on 27 February. The structure of the new board is to be decided at a shareholders’ meeting on 16 April.
€3bn hybrid abandoned
The board also cancelled TI’s €3bn hybrid bond plan. The move follows decisions from ratings agencies not to treat them partially as equity, which means the hybrid structure of any issue would not have helped the company making a ratings downgrade less likely.
TI announced the hybrid bond plan in February last year, issuing a €750m, 60-year subordinated hybrid bond in March. The telco issued a €1.3bn convertible bond in November, which ratings agencies also treated as debt rather then equity.
TI’s current ratings with Standard & Poor’s, Moody’s and Fitch are BB+, Ba1 and BBB-, all with a negative outlook.
At the meeting, the board also looked at operational and market trends in 2013, determining that net debt, which stood at €27bn (US$36.7bn) at the end of the year, and EBITDA were in line with targets. However, domestic and group organic revenues were lower than expected, which the company attributes to competition and changes to national regulations.
“Overall, the recent trend of the domestic operations shows signs of gradual improvement, in line with the new targets of the 2014-2016 plan,” the telco said.
The board intends to examine the financial results for 2013 at a meeting on 6 March.
