Telecom Italia SpA May Drop Network Spin-Off Plan-Reuters

Tuesday, 22 Oct 2013 11:40am EDT 

Reuters reported that Telecom Italia SpA is set to shelve a plan to separate its domestic fixed-line phone network while key shareholder Telefonica decides whether or not to increase its voting stake, people familiar with the matter said. Last month Telefonica reached an agreement allowing it from next year to gradually take over Telco, the investment vehicle for a consortium of Italian financial companies and Telefonica which holds a 22.4% controlling stake in Telecom Italia. The spin-off project envisages putting the network assets, worth an estimated EUR13-15 billion ($17.8-20.5 billion) into a separate company with a view to selling a minority stake in it to state-backed fund Cassa Depositi e Prestiti (CDP). The board of Telecom Italia approved the separation plan in May, a move that could free up resources to cut its more than EUR28 billion of debt and fund investments. But now management intends to propose at a November 7 Board meeting that the plan be dropped, one of the sources said. On that day board directors are expected to discuss a new business plan and approve the Company's quarterly data. Another source said Telecom Italia could opt instead to put the network assets in a separate division. 

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