ROME (Reuters) – Italy’s government is confident that the state-backed plan to restructure Telecom Italia (TIM) through the sale of its prized fixed network assets to U.S. fund KKR will succeed, Industry Minister Adolfo Urso said on Thursday.
KKR this week tabled a multi-billion binding offer for the former telecoms monopoly’s domestic fixed access network, in a bid that is supported by the Rome government.
“We have a plan A and … we are convinced it will succeed,” Urso said during an event in Rome, when asked whether the government was working on alternative options in case the deal does not go through.
KKR is already an investor in TIM’s grid. The Italian Treasury also plans to buy 20% of the infrastructure for up to 2.2 billion euros ($2.33 billion).
A deal with KKR for the sale of Telecom Italia’s main asset is the centrepiece of CEO Pietro Labriola’s strategy to restructure the telecoms group, burdened with 26 billion euros ($27 billion) of net debt.
KKR’s offer values the grid operations, which include fibre and copper cables stretching from switching centres to customers’ homes, at more than 20 billion euros, with roughly half the figure as debt, two sources have said previously.
TIM directors are expected to review the bid at two separate board meetings between the end of October and Nov. 4.
The grid sale has met with strong reservations from TIM’s leading investor Vivendi. The French media group has pressed for a higher price and questioned the sustainability of the business that will be left behind.
($1 = 0.9456 euros)
(Reporting by Giuseppe Fonte and Elvira Pollina, editing by Alvise Armellini and Susan Fenton)
