Italian incumbent Telecom Italia (TI) will sell a small stake in Telecom Argentina to US investment firm Fintech this month while the bulk of its interest will be divested over the next 30 months, subject to regulatory approval.
TI has agreed to sell a…
Italian incumbent Telecom Italia (TI) will sell a small stake in Telecom Argentina to US investment firm Fintech this month while the bulk of its interest will be divested over the next 30 months, subject to regulatory approval.
TI has agreed to sell a 17% stake in Sofora, through which it owns an interest in Telecom Argentina, for US$215.7m before the end of October.
The Rome-based telco overall owns 68% of Sofora, which in turn has a 51% stake in Nortel Inversora, the investment vehicle holding 55% of the Argentine operator.
TI will divest its remaining 51% Sofora stake to David Martinez’s Fintech over the next two-and-a-half years if it secures regulatory clearance, the company said in a statement.
Fintech agreed to acquire TI’s 22.7% indirect stake in Telecom Argentina for US$960m in November 2013.
However, the sale has been delayed by the country’s regulator, Secom, reportedly because of concerns about Fintech’s 40% interest in Cablevision, Argentina’s biggest cable television company, among other reasons.
In December last year, TI received US$113.7m from Fintech for a small stake in Telecom Argentina held by its subsidiary Tierra Argentea. The Italian incumbent now has a 19.3% economic interest in the Argentine telco.
Fintech will pay the outstanding US$630.6m once Secom clears the deal.
However, if the sale is not completed within two-and-a-half years, TI might terminate the agreement and receive a six-month call option to buy back the 17% stake from the US firm or sell the remaining 51% to another buyer, under a guarantee scheme with Fintech that ensures it is paid at least the same amount.
Telecom Italia said it has received a US$600.6m pledge of collateral from Fintech, which will increase its liquidity, without changing its net financial position.
The company added that it will continue to appoint the majority of Sofora’s board members until the deal is completed.
The disposal of Telecom Argentina is a part of a plan rolled out last November by TI’s CEO Marco Patuano in a bid to reduce the company’s debt burden, which stood at €28.8bn as of 30 June 2014, and invest in network upgrades.
Last week, American Tower and Cell Site Solutions (CSS) were rumoured to still be in the race to acquire the tower portfolio of TI’s Brazilian unit, TIM Brasil, which could reportedly fetch at least €500m.
The company has also been looking to offload its 8,000 Italian mobile towers, worth an estimated €1bn (US$1.34bn).
