Incumbent Telecom Italia (TI) has priced €2bn (US$2.13bn) unsecured equity-linked bonds due March 2022 at par.
The telco plans to list the bonds, which carry an annual 1.125 % coupon, on “an internationally recognised, regularly operating,…
Incumbent Telecom Italia (TI) has priced €2bn (US$2.13bn) unsecured equity-linked bonds due March 2022 at par.
The telco plans to list the bonds, which carry an annual 1.125 % coupon, on “an internationally recognised, regularly operating, regulated or non-regulated, stock exchange.”
Proceeds from the offering will be used to pre-fund the company’s recently announced capital expenditures plan.
The conversion price will be set at a 70% premium above a reference price equal to the volume-weighted average price of the shares on the Milan bourse on March 20.
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 alongside the joint global coordinators.
“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 drawn interest from a number of potential bidders, including Orange and a consortium of private equity funds led by former Telstra CEO Sol Trujillo.
A banker familiar with the company said that TI 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 Telecom Italia’s largest single shareholder.
According to the banker, Vivendi chairman Vincent Bollore is likely to play a key role in TI’s future, thanks to his voting rights, position on the board of TI shareholder Mediobanca and experience in pay-TV, which could prove valuable in transforming the telco into a triple-play operator.
