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Last Trade - 05/07/19

Sector
Telecoms
Size
Large Cap
Market Cap £9.79bn
Enterprise Value £32.93bn
Revenue £13.65bn
Position in Universe th / 6849

RPT-EXCLUSIVE-Italy in talks to cut outlay for control of broadband JV Open Fiber -sources

Thu 1st April, 2021 7:41am
(Repeats story first published on Wednesday. Text unchanged.)
    * Italy wants CDP to take control of Open Fiber
    * CDP to buy extra 1% stake in Open Fiber via cash call
    * New plan could lower CDP's outlay to win control

    By Giuseppe Fonte, Elvira Pollina and Stephen Jewkes
    ROME/MILAN, March 31 (Reuters) - Italy is considering a less
expensive route to win control of broadband operator Open Fiber,
three sources familiar with the matter said on Wednesday, as it
looks to play a steering role to boost connectivity across the
country.
    Open Fiber is jointly owned by Italy's biggest utility, Enel
 ENEI.MI , and state lender Cassa Depositi e Prestiti  CDP.UL 
(CDP).
    Enel has been in talks to sell up to 50% of the fiber
infrastructure group to Australian fund Macquarie for 2.65
billion euros ($3.11 billion) since last year and a deal is
expected to be clinched by June.  urn:newsml:reuters.com:*:nL8N2IX5R2
    The original scheme envisaged CDP buying 10% of Open Fiber
from Enel and negotiating governance rights with Macquarie to
secure control.  urn:newsml:reuters.com:*:nL8N2KS64F
    But disagreements over the value of Open Fiber have prompted
the sides to discuss alternative routes, the sources said.
    According to the new scheme under discussion, Enel would
sell all or part of its 50% stake to Macquarie, after which CDP
would raise its stake to 51% through a capital increase, the
sources said.
    CDP and Macquarie declined to comment. Enel was not
immediately available for comment.
    In this way CDP could save hundreds of millions of euros to
win control of the joint venture.
    One of the sources said talks were at an advanced stage,
adding Enel could retain a small stake in Open Fiber.
    Italy's previous government had championed CDP's efforts to
win control of Open Fiber as part of a broader plan to merge it
with the landline assets of former phone monopoly Telecom Italia
(TIM)  TLIT.MI .
    But some ministers from Mario Draghi's new government have
cast doubt on the project, saying Rome is reviewing its options.
 urn:newsml:reuters.com:*:nL8N2LN3OV
    TIM, in which CDP is the second-largest shareholder behind
French media company Vivendi  VIV.PA , has repeatedly said it
will not agree to owning less than 50% of any single network
company - something that could trigger regulatory issues.
    A fourth source said the industry ministry was studying
other options including co-investment schemes to allow operators
to build their networks in some areas and clinch commercial
agreements elsewhere.
    The Draghi government has put digital infrastructure at the
heart of its agenda and is counting on grants from Europe's
Recovery Fund to speed up fiber rollout.
    Draghi has yet to say if his administration intends to
implement the unified network project but the Treasury is in the
meantime pressing ahead with plans to make sure CDP has control
of Open Fiber, one of the sources said.
 ($1 = 0.8512 euro)

 (Reporting by Giuseppe Fonte in Rome, and Elvira Pollina and
Stephen Jewkes in Milan; Editing by Matthew Lewis)
 ((giuseppe.fonte@thomsonreuters.com; +390680307711;))
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