The board of Argentina's federal telecommunications regulator AFTIC has unanimously rejected the sale of a controlling stake in Telecom Argentina owned by Telecom Italia to US-backed investment fund Fintech. One of the reasons given by AFTIC for its decision was that Fintech didn't have the necessary qualifications to operate a telecommunications company in the country. "The board considers that (Fintech) is not in a position to operate and take control Telecom Argentina's services and infrastructure. Fintech has demonstrated neither experience nor expertise," said AFTIC in a statement. Telecom Italia had agreed to sell its 68 percent controlling stake in Telecom Argentina holding company Sofora to Fintech for USD 960 million at the end of 2013 but the deal has been held back by the ongoing financial crisis in Argentina as well as delays in securing regulatory approval.
Although Telecom Italia reached an agreement to sell an initial 17 percent stake in Sofora to Fintech last October, the US fund's 40 percent stake in Argentine cable TV company Cablevision has proved a stumbling block due to local regulations limiting telecoms and media cross holdings. AFTIC’s decision comes just over two weeks after it blocked media conglomerate Clarin’s attempt to take over Argentina’s fourth largest mobile operator Nextel Argentina.
Telecom Italia subsequently issued a statement saying it acknowledged AFTIC’s rejection of the deal, adding that Fintech had indicated that it plans to appeal the decision. Under the terms of the agreement with Fintech, the Italian group has until April 2017 to complete the sale, by which time it could elect to buy back the 17 percent stake in Sofora or seek a third party buyer under a guarantee scheme with Fintech that ensures it will receive at least the same amount for the remainder of the stake (USD 630.6 million). Telecom Italia had hoped to cut its debt and to revive its investment grade with the sale.
