The board of Telco, the holding company with a 22.4% stake in Telecom Italia, has decided upon a €3.4bn (US$4.5bn) refinancing framework made up of a €600m capital increase, a bond of about €1.75bn and a loan facility of about €1.05bn….
The board of Telco, the holding company with a 22.4% stake in Telecom Italia, has decided upon a €3.4bn (US$4.5bn) refinancing framework made up of a €600m capital increase, a bond of about €1.75bn and a loan facility of about €1.05bn.
Proceeds will be used to refinance debt falling due between May and October this year. Specifically, this consists of a €1.3bn of bond, subscribed for by shareholders, and €2.1bn of bank debt. Telco secured the bank loans in 2007 to fund the purchase of its stake in Telecom Italia.
The Telco board also approved the nine-month accounts as of 31 January, recognising a loss for the period of €1.1bn, €901m of which comes from an impairment charge on Telecom Italia. Accordingly, Telco confirmed it has written down the value of its Telecom Italia holding to €4.5bn, or €1.5 per ordinary share.
Telco shareholders consist of Telefonica, Assicurazioni Generali, Mediobanca and Intesa Sanpaolo.
The announcement ends months of speculation about how Telco, which recently extended its shareholders agreement to February 2015, would refinance its soon-to-expire debt.
The board also took the opportunity to announce the appointment of a new member, Natalia Sainz Stuyck, who replaces Mario Martin.
