The board of Telecom Italia’s (TI) largest shareholder, Telco, has formally approved the demerger of the holding company and written down its 22.4% stake by €830.5m (US$1.1bn).
Telco said in a statement that the board has acknowledged…
The board of Telecom Italia’s (TI) largest shareholder, Telco, has formally approved the demerger of the holding company and written down its 22.4% stake by €830.5m (US$1.1bn).
Telco said in a statement that the board has acknowledged shareholders Assicurazioni Generali, Intesa Sanpaolo and Mediobanca’s plans to exercise their right to request the demerger of the holding company.
The unravelling of the pact signed in 2007 will see all members of Telco, which also include Spain’s Telefonica, receive stakes in the Italian incumbent via new subsidiaries. Specifically, Telefonica will get a 14.77% stake, Generali a 4.32% stake and the Italian banks 1.64% each.
Telco members signed an agreement last September which entitles the three Italian shareholders to unwind their interests from 15 June. Telco shareholders will formally vote on the demerger plan at an EGM set for 9 July and the holding company will be dissolved as soon as regulators sign off on it, according to the statement.
As part of the demerger, Telco, which reported a total loss of €952.5m for the last fiscal year, will repay all its outstanding bank debt (€660m as at 30 April 2014) along with a bond issue subscribed to by shareholders (€1.75bn) plus interest. The holding company will fund this with a loan from shareholders, which will each receive a proportionate amount of it just prior to the demerger.
Based on TI’s market capitalisation of about €17.76bn, Telco’s 22.4% stake is worth around €3.94bn after the write down.
TI changes bylaws
Meanwhile, TI has amended its own bylaws to reflect recent regulatory changes granting the Italian state special powers over privatisations.
The new regulations, which came into effect on 7 June, give the state certain veto rights over strategic assets belonging to companies in the telecoms sector, the Milan-based company explained in a statement.
