Telco SpA, a consortium of shareholders in Telecom Italia, said it had recorded losses of €830 million related to “value adjustments” for its stake in the embattled Italian encumbent, also acknowledging that a number of its parents had requested the split-up of Telco.
In a statement filed with the Milan stock exchange, it said that €498.9 million of the writedown came from aligning the book value to the market value of shares at 30 April 2014, with €331.6 million due to a writedown charged during the current financial year.
Telco said that Assicurazioni Generali, Mediobanca and Intesa Sanpaolo had requested the demerger of the consortium, in line with the terms of the shareholder agreement. This will see the 22.4 per cent of Telecom Italia owned by Telco allocated to four new companies owned solely by the Telco shareholders, in proportion to their current ownership levels.
As a result, 14.77 per cent of Telecom Italia will go to the new company owned by Telefonica, 4.32 per cent to Generali, and 1.64 per cent each to Intesa Sanpaolo and Mediobanca. Telco will also pay down its debt via a loan from its parent companies.
According to speculation at the time the split was first reported (early last week), the primarily finance-focused partners have opted to dissolve Telco as part of a strategy to focus on their core businesses, rather than continuing their involvement with a troubled telecoms operator.
While Telco is a minority shareholder in Telecom Italia, due to the shareholding structure it holds a disproportionate influence on the management of the company.
The demerger plan is still subject to approvals from bodies including the Brazilian antitrust and regulatory authorities (CADE and ANATEL respectively), the Argentinian antitrust watchdog (CNDC) and, where appropriate, Italy’s insurance regulator IVASS.
CADE has already expressed concern about Telefonica’s growing influence in Brazil, due to its influence at Telecom Italia, as well as its ownership of rival Vivo.
Telecom Italia is also in the process of selling its Argentinian holding to Fintech Group.