Telecom Italia entered into negotiations with an investment consortium to sell a stake in its joint venture tower unit Inwit, as it looks for a cash injection following a weak Q1.
In an earnings statement, Telecom Italia said it was involved in exclusive discussions with a consortium led by Ardian Infrastructure to sell a stake in Inwit, which it owns as a joint venture with Vodafone Group.
Details of potential terms were not disclosed by the operator, but Bloomberg reported Telecom Italia plans to sell about 16 per cent of its 33.2 per cent stake, which has a valuation of €1.5 billion.
Last month, Telecom Italia and Vodafone sold around 4 per cent of their stakes in Inwit for a total of €800 million, funds the Italian operator used to cut debt.
Telecom Italia’s Q1 performance underlined why it is looking to raise funds through assets sales.
It reported a revenue decline of 8.4 per cent year-on-year to €4 billion, attributed to lower customer store visits during a Covid-19 (coronavirus) lockdown, falling product sales and a decline in roaming traffic.
Net debt, which it has been looking to reduce for a while, remains high at €26.7 billion, although it was reduced by €1.8 billion.
The net profit metric, however, improved from €165 million to €560 million, benefitting from capital gains through the Inwit merger with Vodafone, along with reductions in financial charges and taxes.
Commenting on the ongoing pandemic, Telecom Italia said it increased network capacity and coverage, as it experienced traffic spikes up to a maximum of 80 per cent for fixed line, 30 per cent to 40 per cent in mobile, and 11-times in video applications for remote working.
While its financial performance was impacted Q1, Telecom Italia said the increased adoption of digital services gave it optimism for its medium- to long-term outlook.
Telecom Italia also revealed it is facing legal action from Iliad Italia over alleged anti-competitive conduct.
Iliad argued Telecom Italia’s Kena Mobile brand had hindered its “entry to and consolidation in the mobile phone market in Italy”, with the France-headquartered company seeking damages of at least €71.4 million.
Telecom Italia said it would defend itself agains the claims.Subscribe to our daily newsletter Back