Telefonica plans to keep Telecom Italia stake
By Leila Abboud and Robert Hetz
BARCELONA/MADRID (Reuters) - Spain's Telefonica (TEF.MC: Quote) wants to remain a long-term shareholder in Telecom Italia TLIT.MC and ruled out selling its stake to cut debt, its chief financial officer said on Wednesday.
CFO Angel Vila, speaking at a Morgan Stanley TMT conference, also said Telecom Italia did not need a capital increase, referring to a proposal made by Egyptian tycoon Naguib Sawiris on Monday to invest in the debt-laden Italian company using this mechanism.
"We are stable investors in Telecom Italia, and we are not considering monetizing the stake in Telco," said Vila, referring to the Telco holding company that owns 22.4 percent of Telecom Italia.
Telecom Italia had said on Monday that it would consider Sawiris' proposal and had presented some details to its board, but neither side disclosed the size and the objectives of the potential investment.
How Telecom Italia' major shareholders - including Telefonica - respond to Sawiris offer will play a role in whether it gains momentum.
Telecom Italia is controlled by unlisted Telco, made up of Telefonica and three Italian financial institutions, which collectively own 22.4 percent of the group. Telefonica owns roughly 10 percent of Telecom Italia.
It is not clear how big an investment Sawiris wants to make in Telecom Italia, although press reports have said between 2-5 billion euros. It is also not clear if any capital increase would be open to all investors or only Sawiris. He was previously involved in Italy through mobile group Wind, which he sold last year to Russia's Vimpelcom VIP.N. Continued...