Italy set to take over Telecom Italia’s submarine cable unit -draft
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Italy’s Treasury can take full ownership of Telecom Italia’s (TIM) submarine cable unit Sparkle as part of an agreement with U.S. fund KKR to jointly bid for the group’s landline grid, a draft government decree showed on Tuesday.
The Italian cabinet approved two decrees providing for the Treasury to take a 15-20% stake in NetCo, a venture comprising both TIM’s domestic fixed-access network and submarine cable unit Sparkle.
According to the two documents seen by Reuters, the Treasury will also be able to acquire Sparkle “at a later stage”.
An international wholesale telecoms operator, Sparkle manages fibre cables that stretch over 600,000 kilometres. It was valued at up to 1.2 billion euros in KKR’s preliminary bid for NetCo, sources have said.
The Treasury stake in Telecom Italia’s grid would have the same property rights assigned to other shares, one of the decrees indicated.
TIM’s Milan-listed shares rose by more than 2% in early trading on Tuesday.
KKR has offered around 23 billion euros ($24.86 billion) for NetCo once debt and a number of variable items are included, while leaving the door open for the government to join its bid and maintain oversight of the asset, which is deemed of strategic importance by Italian authorities.The draft decree authorises the Treasury to submit a binding offer alongside KKR and other minority investors over NetCo, resulting in a minority stake for it worth a maximum 2.2 billion euros.
