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Telecom Italia quashes speculation over Brazil sale

Telecom Italia has strongly denied recent reports that it would sell its Brazilian subsidiary in order to reduce its debt.

Bloomberg had claimed that the operator had enlisted US bank Morgan Stanley to assist with the sale of TIM Brasil.

However, the operator dismissed the notion that there were “any ongoing contacts with potential buyers of the subsidiary, that a sale or combination with other operators are being pursued or that purchase offers have been received, not even unsolicited”.

The statement continues: “Telecom Italia wishes to make clear that the rumours of presumed plans for the deconsolidation and/or total or partial valuation of the Brazilian asset described and repeated by journalists, pundits and analysts are inferences wholly without foundation.”

The announcement crushes ongoing speculation that Telecom Italia could sell off TIM Brasil in order to raise as much as €4 billion to lower its debt. However, it may still be investigating the possibility of selling its Brazilian towers business and then leasing back the infrastructure - a measure which various operators in Thailand have explored in a bid to reduce their debt.

The Italian firm could raise as much as €700 million ($951 million) towards its €4 billion target by selling off the 7000 towers that it owns in Brazil. A possible buyer could be American Tower, which recently acquired 2800 towers in Brazil from NII. Another debt-reduction measure was the recent sale of a 22.7% stake in its subsidiary Telecom Argentina to the investment firm Fintech.

Telecom Italia’s attempts to reduce its debt have ramped up since an agreement struck in September that allowed Telefonica to wield greater influence over the Italian operator, despite the fact that they technically remain competitors in the Brazilian market due to local rules.

Telefonica is reportedly keen to sell TIM Brasil, although it seems that Telecom Italia has quashed and hopes for this.

 

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