Telecom Italia weighs sale of INWIT stake as employees stage strike

MILAN, Feb 23 (Reuters) – Telecom Italia (TLIT.MI) (TIM) is contemplating promoting its stake in cell tower group INWIT (INWT.MI) to French funding fund Ardian as a part of its efforts to shore up its funds, a supply near the matter stated on Wednesday.

Below such a possible deal, debt-laden TIM might elevate 1.3 billion euros ($1.5 billion) from the sale of its 15.4% oblique stake in Milan-listed INWIT, based mostly on present market worth.

Telecom Italia and Ardian, which already owns a 15% oblique holding in INWIT, declined to remark.

The potential INWIT sale, first reported by Italian day by day La Repubblica, comes as new TIM boss Pietro Labriola is engaged on a standalone plan to be introduced to buyers subsequent week as an alternative choice to a ten.8 billion euro takeover method from U.S. group KKR (KKR.N).

1000’s of TIM employees who concern for his or her jobs within the upheaval at Italy’s largest telecoms group went on strike on Wednesday.

“Folks working in buyer care operations are probably the most uncovered to jobs cuts if the administration resolve to break-up the group and promote its components,” stated Isabella Marotta, 43, a Telecom Italia worker since 2005, who was protesting in Milan.

Below Labriola’s draft plans, TIM’s home enterprise can be break up between a community enterprise and a companies arm in a bid to unlock worth by means of M&A offers and belongings disposals.

Below such a plan, the service arm would initially take up some 15,000 out of about 42,000 Telecom Italia home employees whereas the rest can be transferred to the community firm, one other supply accustomed to the matter stated.

Underperforming a flat Italian blue chip index (.FTMIB), TIM shares ended 3.3% down at 0.38 euros on Wednesday, beneath KKR’s 0.505 euros a share proposal, which was billed as too low by Telecom Italia’s prime investor Vivendi (VIV.PA).

RESULTS LOOM

La Repubblica additionally reported on Wednesday that TIM is considering a stability sheet clean-up as its 2021 outcomes shall be worse then anticipated when they’re revealed subsequent week.

In December, TIM stated it anticipated a “low-teens lower” in 2021 natural earnings earlier than curiosity, tax, depreciation and amortisation after leases (EBITDA-AL) for its home enterprise. learn extra

TIM, which issued three revenue warnings final yr, is about to guide new one-off provisions and asset impairments as a part of 2021 outcomes and also will scrap dividends on extraordinary shares, one other supply stated, confirming La Repubblica’s report.

Analysts have additionally warned that TIM 2021 outcomes are anticipated to be negatively impacted from a change in a tax scheme it had tapped in 2020, heightening the chance of a major one-off hit to the underside line.

($1 = 0.8832 euros)

Reporting by Elvira Pollina, extra reporting by Giuseppe Fonte, modifying by Maria Pia Quaglia, Keith Weir and Jane Merriman

Our Requirements: The Thomson Reuters Belief Ideas.