Telecom Italia (TI) agreed to alter the terms of its agreement to sell its stake in Telecom Argentina to investment fund Fintech, following months of delays to the completion of the deal.
While the total value remains at $960 million, as first agreed in November last year, Fintech will now pay $215.7 million by the end of October to secure a 17 per minority interest in Telecom Argentina’s holding company Sofora, which is owned by Telecom Italia International.
Fintech will subsequently pay $550.6 million to acquire a 51 per cent controlling stake in Sofora currently held by TI and Telecom Italia International, subject to regulatory approval – the issue which has delayed the deal being completed in its original form.
Telecom Italia said that this is “expected to occur within the next two and one-half years”.
TI has so far received $113.7 million from Fintech since the terms of the deal were first agreed.
There will be no “material change” in the corporate governance of the Argentinian businesses in the meantime, according to TI.
If the deal is not completed within two and a half years, TI has a call option to buy back the 17 per cent owned by Fintech, or could sell the remaining 51 per cent stake to another third party.
Delays in regulatory approval of the deal have seen the deadline for completing the deal moved twice, first from 12 August to 1 September, then to 25 September.
Towards the end of September, TI said it was planning to “evaluate and define” possible amendments to the sale process.
Disposing of the Argentina stake is an important part of the Italian operator’s asset sale strategy as it looks to reduce its debts.