Incumbent Telecom Italia (TI) has set the conversion price for its previously-announced €2bn (US$2.13bn) unsecured equity-linked bonds at €1.8476 per share, representing a 70% premium above the volume-weighted average price of the shares on the…
Incumbent Telecom Italia (TI) has set the conversion price for its previously-announced €2bn (US$2.13bn) unsecured equity-linked bonds at €1.8476 per share, representing a 70% premium above the volume-weighted average price of the shares on the Milan bourse on 20 March.
The telco plans to list the March 2022 bonds, which carry an annual 1.125 % coupon and have been priced at par, on “an internationally-recognised, regularly-operating” stock exchange.
Proceeds from the offering will be used to pre-fund the company’s recently-announced capital expenditure plan.
BNP Paribas and JP Morgan are acting as joint global coordinators and joint bookrunners on the deal. Barclays, Citi, Credit Suisse and Unicredit are also serving as joint bookrunners.
“This transaction confirms investor appetite for Telecom Italia and its equity potential,” the company said in a statement.
Last month, the Rome-based operator announced a two-year strategic plan, which will see it invest €14bn in network upgrades in Italy and Brazil, where it controls the second-largest mobile carrier TIM Brasil.
The highly-leveraged company is striving to reduce its €26.65bn debt burden, and expects the new plan will result in savings of about €1bn over the next three years due to cost efficiencies.
The telco reported consolidated revenues for 2014 of €21.57bn, down 5.4% year-on-year. EBITDA totalled €8.7bn, down 6.8% on the 2013 result.
The company has recently attracted interest from a number of potential bidders, including Orange and a consortium of private equity funds led by Sol Trujillo, a former CEO of Australia’s Telstra.
A banker familiar with TI said it has become particularly attractive following Telefonica’s transfer of its 8.3% of voting shares in the telco to Vivendi, as part of its acquisition of Brazilian broadband provider GVT.
Following the share transfer, French conglomerate Vivendi will become TI’s largest single shareholder.
