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TI.A - Telecom Italia SpA News Story

$5.21 0.0  0.0%

Last Trade - 05/07/19

Sector
Telecoms
Size
Large Cap
Market Cap £9.80bn
Enterprise Value £33.02bn
Revenue £13.69bn
Position in Universe th / 6850

UPDATE 1-Italy tells Enel plans to create national broadband network cannot be postponed

Mon 23rd November, 2020 8:40pm
* Ministers send letter as Enel holds board on business plan
    * Italy wants Open Fiber to merge with TIM's landline grid

 (Recasts, adds details, background)
    By Giuseppe Fonte and Stephen Jewkes
    ROME/MILAN, Nov 23 (Reuters) - Italy told top utility Enel
 ENEI.MI  on Monday it must bear in mind in any sale of its
stake in broadband group Open Fiber that plans to create a
national ultra-fast network are a matter of urgency and cannot
be delayed.
    Enel, which jointly controls Open Fiber with state lender
CDP, received a binding bid from Australia's Macquarie in
September for all or part of its 50% stake.
    But Rome, which is looking to merge phone incumbent Telecom
Italia's  TLIT.MI  landline grid with Open Fiber, has urged the
fund to buy less than 50% so CDP can take control.  urn:newsml:reuters.com:*:nL8N2GE11H
    In a letter to the utility's top management, the economy and
industry ministers said plans to create a unified broadband
infrastructure independent of TIM and open equally to all market
players were of strategic importance for Italy.
    A source familiar with the matter said Rome wanted Enel to
ensure CDP had control of Open Fiber if the utility sold its
stake.
    "The terms of any sale must fit in with the government
blueprint for creating a single network," the source said.
    Enel CEO Francesco Starace is expected to read the
ministers' letter to an Enel board that met on Monday to approve
the utility's new business plan.
    Enel declined to comment.
    CDP, which has a right of first refusal on the Enel stake if
it sells, has asked to raise its stake to 60%, sources have
said, in a move that would leave Macquarie the option of buying
the remaining 40%.
    The government is urging Enel to comply with its plans, but 
wants Starace to guarantee Macquarie's bid contains no
conditions that could run against the grain of the blueprint.
    The Macquarie bid, which values Open Fiber at more than 7
billion euros ($8.3 billion) including debt, contains a series
of conditions including earn out clauses. 
    State-controlled Enel did not sign off on a Memorandum of
Understanding (MOU) ratified by TIM and CDP in August, setting
out a road map for the creation of a unified fast broadband
network.
    TIM has said it wants to keep a majority stake in any single
network operator but Starace says any such infrastructure should
remain outside the control of a vertically-integrated incumbent
with a big retail business.
    Enel has a board meeting on Dec. 17, people familiar with
the matter said.


($1 = 0.8442 euros)

 (Reporting by Giuseppe Fonte and Stephen Jewkes, Editing by
Timothy Heritage)
 ((stephen.jewkes@thomsonreuters.com; +39.0266129695; Reuters
Messaging: stephen.jewkes.thomsonreuters.com@reuters.net))
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