Telecom Italia has asked banks to look into a potential spin-off of its fixed-line network.
The Italian incumbent, which has considered numerous options this year for reducing net debt of about €30.36bn, issued a brief statement confirming the…
Telecom Italia has asked banks to look into a potential spin-off of its fixed-line network.
The Italian incumbent, which has considered numerous options this year for reducing net debt of about €30.36bn, issued a brief statement confirming the decision to seek advise , saying “advisory activity” is at a “preliminary phase”, involving the economic, financial and technical elements of such a deal.
Telecom Italia is understood to be in talks with state-backed Cassa Depositi e Prestiti (CDP) to create a separate company for its fixed-line network, which has an estimated value of €9bn to €15bn,and boost investment in broadband.
Italian newspaper Il Messagero reported earlier this week that about 10 banks – including Mediobanca, Intesa Sanpaolo, JP Morgan, Credit Suisse, Morgan Stanley and Citi – have been invited to submit proposals by 15 October.
Telecom Italia CEO Franco Bernabe said in September that the company would soon make a decision on the potential spin-off of its fixed-line network. At a recent event, he told analysts that outside investment in the network posed more potential rewards than risks.
Meanwhile, COO Marco Patuano recently confirmed an ongoing “dialogue” with CDP over a network venture.
A potential deal could see CDP acquire a minority investment in the new company.
Bernstein Research analysts speculated late last month that partial outside investment in the network, rather than a full-scale spin-off, is a more likely scenario, particularly in light of Telecom Italia’s plans to build fibre networks with Swisscom-owned Fastweb in some Italian regions.
“The current, most discussed version includes the injection of about €3bn of capital into TI’s network for a 30% stake in that asset,” they said.
The former incumbent’s largest shareholder is Telco Spa with a 22.4% which, in turn, is owned by Telefonica, Generali Group, Intesa Sanpaolo and Mediobanca.
