Telecom Italia CEO says deals needed to cut debt mountain

Future Generation Australia

15/02/2023 11:45

By Elvira Pollina
       MILAN, Feb 15 (Reuters) - Telecom Italia (TIM)  TLIT.MI 
needs to take one-off measures selling assets to cut its debt
and revamp its business, the head of the former national phone
monopoly said on Wednesday.
    Chief Executive Pietro Labriola said TIM would not comment
on a non-binding bid from KKR  KKR.N  for its landline grid
until a board meeting scheduled for Feb. 24.
    But he told analysts that TIM needed to take "extraordinary
measures" to reduce its leverage. 
    Net financial debt stood at 25.4 billion euros ($27.2
billion) at the end of 2022, up by 3.2 billion euros from the
year before.
    Labriola was speaking after TIM late on Tuesday unveiled a
new set of financial targets indicating a return to growth this
year after its 2022 earnings fell less than initially feared.
    TIM expects group core earnings including lease costs to
grow by a 'low to mid single digit' figure this year after a
10.6% drop in 2022, with key service revenue in its battered
domestic market seen broadly stable.
    By 1120 TIM shares were up 1.3% against a slightly lower 
Italian blue chip index  .FTMIB .
    Hit by a steady erosion of earnings and sales over the past
decade amid tough competition at home, TIM is seeking a
turnaround centred on a sale of its prized landline grid.
    KKR, already a minority investor in TIM's landline grid,
this month offered to buy a controlling stake in a venture
comprising TIM's fixed network and submarine cable unit Sparkle.
    Two sources familiar with the matter said KKR values the
venture at 20 billion euros, including an earnout of some 2
billion euros.
    TIM's second biggest investor, state lender CDP, is also
studying an offer together with Australian infrastructure fund
Macquarie  MQG.AX  for an asset over which the government has
special powers to block unwanted interest.
 (Reporting by Elvira Pollina
Editing by Keith Weir)
 ((elvira.pollina@thomsonreuters.com;))