Telecom Italia (TIM) (BIT:TIT) has completed the US$960m sale of its remaining stake in Telecom Argentina (BCBA:TECO2) to investment firm Fintech almost a year and a half after a revised agreement was signed. Mediobanca analyst Fabio Pavan said he welcomed the final disposal for TIM as “the cash-in could support the NGN [Next Generation Network] investments and debt reduction”.
Telecom Italia (TIM) (BIT:TIT) has completed the US$960m sale of its remaining stake in Telecom Argentina (BCBA:TECO2) to investment firm Fintech almost a year and a half after a revised agreement was signed.
The closure follows approval from Argentina’s new TMT regulator Enacom last week.
The Italian incumbent said in a statement that it received US$556.6m from Fintech yesterday for its 51% stake in Sofora Telecomunicaciones, the parent company of investment vehicle Nortel, which controls Telecom Argentina.
It has received a further US$50m from other Sofora shareholders in line with the sale agreements signed on 24 October 2014.
US-based Fintech, led by low-profile Mexican financier David Martínez Guzmán, had already paid US$329.5m toward the purchase. The price tag also includes future revenues to be generated by making technical support services available to Telecom Argentina companies, secured by a pledge of collateral.
Berenberg TMT analyst Paul Marsch said the deal will have very little impact on TIM, which already had arrangements in place to monetise it despite the delays.
Mediobanca analyst Fabio Pavan, however, said he welcomed the final disposal as “the cash-in could support the NGN [Next Generation Network] investments and debt reduction”.
TIM, led by Marco Patuano (pictured), agreed in November 2013 to sell a 68% stake in Sofora to Fintech – translating into an indirect 22.7% stake in Telecom Argentina – for US$960m. It sold an initial 17% stake to Fintech for US$114m in December 2013.
TIM’s resulting 51% stake in Sofora equated to a 19.3% indirect stake in Telecom Argentina. The remainder of Sofora is owned by Fintech (17%), and local investors Grupo Werthein (32%).
Under a revised agreement signed in October 2014, TIM gained the right to terminate the pact if the second part of the deal did not complete within the 30 months ending in April 2017.
The deal was derailed by Enacom’s predecessor AFTIC, seen as heavily influenced by former Argentine president Cristina Fernández de Kirchner, in October 2015.
Last month, Fintech made a bid for some Telecom Argentina shares listed in Buenos Aires, offering Ps46 (US$3.02) per share. The offer period runs for 20 working days from 24 February and may be extended for an extra five working days if necessary. This transaction is also subject to Enacom’s approval.
Commenting on ongoing speculation that TIM might also exit Brazil, Marsch said he thinks this is very unlikely to happen unless a buyer offers them “a very, very attractive price”.
But “Oi cannot afford it, Telefonica Brazil is occupied in other directions, Claro will not go it alone, and that leaves AT&T, whose ambitions in Brazil are unclear at this time, but whose primary LatAm focus has been Mexico”, he said.
