Telecom Italia reportedly entered discussions on the possible sale of its remaining stake in Italian tower company Inwit as it seeks ways to shore up its balance sheet ahead of worse-than-expected 2021 results.

Italian daily La Repubblica reported Telecom Italia was negotiating the sale of its direct 15.1 per cent share in Inwit to French investment fund Ardian for an estimated €1.4 billion.

Reuters reported Inwit had a market capitalisation of €8.6 billion at the close of trading yesterday (22 February).

The La Repubblica article explained Telecom Italia is set to book new one-off provisions and asset impairments as part of its 2021 results, and will also scrap dividends on ordinary shares. The operator’s results are due to be published next week.

Telecom Italia and Vodafone Group’s Vantage Towers jointly control Inwit. Ardian already owns a stake in the towerco via a holding company called Daphne 3 following a deal with Telecom Italia in 2020.

The operator and Ardian respectively own 51 per cent and 49 per cent of Daphne 3, which in turn controls 30 per cent of Inwit. Vodafone owns a 33.2 per cent stake in the Italian towerco.

In the meantime, Telecom Italia CEO Pietro Labriola is currently working on a plan offering alternative options to a near €11 billion takeover bid by KKR.

The CEO is understood to have proposed separating Telecom Italia’s infrastructure assets from its services operations and Reuters reported the operator plans to make a decision on the KKR offer in mid-March, after Labriola releases a strategy for the coming years.

Telecom Italia’s board also recently tapped Adrian Calaza as CFO to help implement the revised strategy.