By Danilo Masoni
MILAN Nov 14 Telecom Italia agreed to
sell its controlling 22.7 percent stake in Telecom Argentina
to Fintech Group for $960 million, as it presses on
with a plan to raise 4 billion euros to fix its balance sheet
and revive its business.
Telecom Italia said in a statement on Thursday the sale to
the U.S.-based investment fund was not expected to have a
significant impact on its consolidated net debt amounting to 28
billion euros ($38 billion).
Later on Thursday, Standard & Poor's cut Telecom Italia's
credit rating by one notch to 'BB+' with a negative outlook,
citing the company's persistent high debt and expectations of
continued pressure on growth in its Italian home market.
The ratings downgrade means that Telecom Italia, which faces
peak debt maturities in 2014, has lost its investment grade
status, making it more expensive for the company to borrow
"Telecom Italia will likely continue to face tough
competitive, economic, and regulatory environments in Italy,"
the ratings agency said.
Fintech, owned by Mexican businessman David Martinez, plans
to launch a tender offer for remaining shares in Telecom
"We see tremendous opportunities for growth in the Argentine
market and we will pursue a major investment program to take
advantage of them," Martinez said in a statement.
Shares in Telecom Italia ended 0.15 percent lower on the
Milan stock exchange, while Telecom Argentina was trading up 2.3
percent in Buenos Aires at 1830 GMT.
The Argentina deal has been criticised by some minority
investors in Telecom Italia, as well as by Italian politicans
who say the sale favours the interests of its main shareholder,
Spanish competitor Telefonica, which is also active in
Telefonica struck a deal in September to gradually take over
its Italian rival by buying out co-shareholders in Telco, the
holding company that controls Telecom Italia. The deal is being
looked at by Italian market regulator Consob.
But in a Thursday interview Telefonica Chairman Cesar
Alierta said the Spanish group had no plans to take control of
Italian centre-left senator Massimo Mucchetti, who is
pushing for a new takeover law that may force Telefonica to buy
out Telecom Italia, said Telecom Argentina was sold "for a