KKR made an initial agreement with Italy’s finance ministry for the state to take a stake of up to 20 per cent in a Telecom Italia fixed network spin-off, should its exclusive negotiations with the operator result in a final deal.

In a brief statement, Italy’s Ministry of Economy and Finance announced the signing of a Memorandum of Understanding with the investment company, which establishes terms for a binding offer for an equity stake of up to 20 per cent.

It noted the conditions agreed “foresee a decisive role of the government in defining the strategic choices”.

Telecom Italia is currently in exclusive talks with KKR over the sale of fixed network spin-off NetCo with a view to receiving a binding offer for the asset by the end of September.

In its recent Q2 financial results statement, the operator indicated its activities preparing for the sale were progressing as planned.

Alongside the Italian government, Reuters reported Italy-based investment fund F2I is set to buy a stake in NetCo.