Telecom Italia values fixed network at 6x EBITDA - report

Telecom Italia is said to have valued its fixed-line network at around six times annual EBITDA from the operations, as part of preparations to spin off the network infrastructure into a new company. According to company documents seen by Bloomberg, the network is valued at about EUR 14 billion. Sales at the new company, called Opac SpA, are forecast to slip 0.3 percent this year to EUR 4.6 billion, while EBITDA is forecast down 1.6 percent to EUR 2.33 billion. The valuation is based on a multiple of six times EBITDA, said a person with knowledge of the matter. 

Telecom Italia's board is scheduled to meet 23 May to complete a review of the spin-off plan. The operator is considering a sale of an initial 30 percent stake in the new company to state lender Cassa Depositi e Prestiti after a separation. The proceeds would be used to reduce the company's debt and invest in expanding network coverage. 

Italian Industry Minister Flavio Zanonato told Parliament on 22 May that the government would closely monitor Telecom Italia's separation plan. He noted the government can intervene in matters pertaining to national infrastructure thanks to its golden share in Telecom Italia, while adding that it must respect Telecom Italia's independence as a publicly listed company. Another unnamed source told Bloomberg that Italy's government is in favor of naming a CDP executive to oversee the new company as its chairman and to ensure a level playing field for other carriers, while Telecom Italia could name its CEO.