Telecom Italia shoots down Brazilian selloff

Following suggestions that TIM’s Brazilian operations could be acquired by Vodafone, Telecom Italia has dispelled claims that it is negotiating a sale of the operator in order to reduce its debt.

The group has confirmed that “there is no formal or informal process ongoing for the disposal of its interest in TIM Partecipaçoes”. Telecom Italia’s debt is reportedly more than double its market value, at €29 billion.

Telefonica, which has signed a deal to increase its holding in Telecom Italia, is believed to be in favour of selling the Brazilian operation. This is at odds with the newly-resigned former CEO of Telecom Italia Franco Bernabe, who was opposed to a Latin American selloff.

Acting CEO Marco Patuano has reportedly drafted a business proposal which lays out the futures of TIM Partecipacoes and Telecom Argentina, and may also overhaul the company’s Italian operations if it is deemed valuable.

Bernabe’s resignation, coupled with a weak balance sheet, has prompted Moody’s Investors Service to bump Telecom Italia’s debt down to junk status.