Italy’s TIM, CDP sign off preliminary accord on single network plan

The Tim emblem is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Picture

MILAN, Could 29 (Reuters) – Telecom Italia (TIM) and state lender CDP have signed off a preliminary settlement on Sunday to mix the telephone group’s fastened community belongings with these of state-backed rival broadband agency Open Fiber, they mentioned on Sunday.

The transfer goals to pave the best way to the creation of a single broadband community, as TIM (TLIT.MI) CEO Pietro Labriola irons out a turnaround plan centered on a full-blown cut up of the group’s landline grid from service operations. learn extra

CDP, which is TIM’s second largest investor with a ten% stake and holds a 60% stake in Open Fiber, will management the mixed community entity, the assertion mentioned, including that the goal of the events is to barter a binding deal by end-October.

Any binding settlement can be topic to the approval of nationwide and EU antitrust authorities, whereas TIM’s shareholders must vote on the deal.

The preliminary settlement has the backing of infrastructure funds Macquarie (MQG.AX) and KKR (KKR.N), which maintain minority stakes in Open Fiber and in TIM last-mile community unit FiberCop respectively, and can take part the mixed entity.

Italy is eager to create a single broadband community champion to keep away from duplicating investments and to hurry up a fibre optic roll-out as nicely promote digitalisation of the economic system.

Beneath strain for years in its home market, debt-laden TIM plans to hive off its landline community, an asset for which analysts pegged valuations at between 15 and 20 billion euros ($16 billion – $21.5 billion).

Whereas the ultimate construction of the cope with Open Fiber has not been determined, choices beneath dialogue embrace an outright sale of TIM’s fastened community belongings, sources have mentioned.

The mixed entity will take up a good portion of TIM’s debt and home employees, the identical sources added.

TIM and CDP signed a preliminary settlement in 2020 however that plan, which then envisaged TIM maintaining a majority stake within the mixed entity, run aground as a result of political, regulatory and valuation points.

Reporting by Elvira Pollina; writing by Elvira Pollina and Francesca Landini; enhancing by Nick Macfie and Diane Craft

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