MILAN, Sept 26 Shares in Telecom Italia
fell more than 2 percent before turning positive in
morning trade on Thursday on uncertainty over the debt-laden
company's strategy following a deal earlier in the week to give
Telefonica gradual control of its Italian rival.
"The governance framework is still quite uncertain because
it is not clear whether the positions expressed by its chairman
(Franco Bernabe) are backed by the company's board," ICBPI
analyst Stefano Vulpiani said in a note.
Bernabe said on Wednesday said the company needed a capital
increase to prevent its rating being downgraded to junk, while
asset sales - an option seen as favoured by Telefonica - may
take too long. The company's five independent board members -
out of a total of 14 - also said they were against the sale of
assets, such as those in south America.
The analyst said a 5 billion-euro ($6.75
billion)recapitalisation would allow Telecom Italia to keep its
investment grade credit rating and bring its net debt to 2.2
times core earnings.
($1 = 0.7403 euros)
(Reporting by Danilo Masoni)