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NetCo includes TIM’s fixed line network assets and their submarine cable subsidiary unit, Sparkle
The Italian government has announced that it has approved two decrees that will enable it to take up to a 20% stake of Telecom Italia (TIM)’s NetCo, with the rest going to US investment firm KKR.
The Italian state is a pre-existing shareholder of TIM, owning a 9.8% stake through state investor Cassa dei Depositi (CDP).
The move affirms the Memorandum of Understanding (MoU) signed earlier this month between the Italian treasury and KKR.
Italy’s economic minster Giancarlo Giorgetti said that the two decrees will allow the Italian treasury to acquire the minority stake (20%) in NetCo, worth as much as €2.2 billion, according to Reuters.
According to Giorgetti, the move will “reaffirm the public control over certain strategic choices regarding an infrastructure that we deem as strategic,” while Prime Minister Giorgia Meloni said the agreement would allow the government “to defend the national interest and the workers”.
“What we are taking today is a first step, which will be followed by more market-driven decisions,” she added.
To reduce its debt pile of €26.2 billion, TIM has been planning to sell off its fixed network assets for some time.
However, TIM could still be set to face resistance from its biggest shareholder, French media giant Vivendi, before the set deadline of 30th September. Vivendi argues that TIM’s assets are worth around €30 billion and are therefore being undervalued by KKR, who is believed to have made a non-binding bid of €23 billion for NetCo back in June.
TIM must receive the green light from Vivendi, who have a 24% stake in the firm, for the deal to go ahead.
Vivendi have not yet commented on the developments.
In addition, Italian infrastructure fund F2I would also be set to invest in NetCo, which would bring the Italian government’s stake in the unit up to 30%.
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