Italian government agrees to sell Telecom network to KKR with 20% stake

The Italian Ministry of Economy signed this Thursday a memorandum of understanding with the US investment fund KKR for which the purchase of the fixed network of the telecommunications giant is expected Telecomalthough with a participation for the Italian State of 20% in the entity resulting from the operation, called NetCo.

“The agreement provides for the formulation of a binding offer that establishes, among other things, the entry of the ministry to NetCo with a percentage of up to 20%”the ministry said in a statement late on Thursday.

The same source assured that “The terms of the offer from the point of view of the relations between the parties provide for a decisive role for the government in defining strategic options” and that the next steps be detailed in a ministerial decree.

Last June, Telecom (also known as TIM) accepted the offer of the US investment fund KKR to take over its fixed network, which according to the economic press has valued this network at around 23,000 million euros and intends to integrate “in a start-up company” called NetCo.

“A unanimous mandate was given to initiate, exclusively, an improved negotiation with KKR, aimed at obtaining the presentation -as soon as possible, in a manner compatible with the complexity of the operation, and in any case before September 30- of a definitive and binding offer according to the best terms and conditions”the company reported.

The decision led to the rejection of the offer launched by the consortium formed between Cassa Depositi e Prestiti (CDP) -whose main shareholder is the Ministry of Economy- and Macquarie, to whom the board of Telecom “appreciated the interest”.

The group’s net debt stood at 26,000 million as of June 30, 2023, almost one billion more than at the end of 2022.

Source: EFE