Telecom Italia’s board of directors has delayed a decision on whether to spin off its fixed-line network by another week.
The board met yesterday (23 May) to discuss the potential spinoff of the network, which the company has reportedly valued at up…
Telecom Italia’s board of directors has delayed a decision on whether to spin off its fixed-line network by another week.
The board met yesterday (23 May) to discuss the potential spinoff of the network, which the company has reportedly valued at up to €14bn (US$18.16bn). The Milan-based telco issued a statement after market close saying the board has resolved to reconvene to discuss the matter on 30 May.
TI is considering spinning off its network to help cut debt that stood at €28.76bn on 31 March. The company aims to reduce this to €27bn by the end of the year.
The company has been in talks with state-controlled lender Cassa Depositi e Prestiti (CDP) regarding the potential spinoff for some time, but the parties have not reached an agreement.
During a conference call with analysts earlier this month, TI CEO Franco Bernabe said that, whatever the board’s final decision on the matter, the company will retain control of the network.
He stressed that, even if the board decides to go ahead with the spinoff, it will take a “long time” to implement. “It’s not simply an organisational deal. It would be a transformative deal for the Italian market,” he said.
Bernabe said such a deal would require major regulatory changes and that the company would need to discuss the matter with government, regulators and other stakeholders. Asked whether the spinoff could happen this year, he said it was “too early to say”.
TI is also looking into the feasibility of a mobile tie-up with Hong Kong-based Hutchison Whampoa’s 3 Italia.
The market has speculated that a fixed-line network spinoff agreement would make a deal with Hutchison more palatable to authorities.
