Telecom Italia has been approached by the Argentine government and told to drop its plans to raise its stake in Sofora, according to Italian newspaper, Milano Finanza.
TI had wanted to exercise a call option that it held which would have allowed it to…
Telecom Italia has been approached by the Argentine government and told to drop its plans to raise its stake in Sofora, according to Italian newspaper, Milano Finanza.
TI had wanted to exercise a call option that it held which would have allowed it to increase its 50% shareholding of Sofora, a holding company that controls Telecom Argentina. The Argentine government, which has been at loggerheads with TI, may allow the firm to keep the 50% it already owns, as long as local participants can buy the rest.
The government had been threatening TI with a monopolies investigation and forced sale of its interest in Sofora. This stemmed from the fact that TI is 24.7% owned by Spain’s Telefonica, which owns Argentina’s only other telecommunications operator.
The other 50% of Sofora is owned by the family office of the Argentinean Werthein Group.
TI had tried to exercise a call option for the 50% of Sofora it did not already own in January 2009, but the National Commission for the Defence of Competition (CNDC) froze the move, saying it would lead to the monopolisation of the telecoms market. Three months later the CNDC barred TI from making decisions regarding its local unit, stripping the company’s directors of their voting powers.
