Telefonica wants to remain a long-term shareholder in Telecom Italia and ruled out selling its stake to cut debt, Reuters reports, citing Telefonica CFO Angel Vila. The statement was made at a Morgan Stanley TMT conference. According to Vila, Telecom Italia did not need a capital increase, referring to a proposal made by Egyptian tycoon Naguib Sawiris to invest in the 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 said 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.
Telecom Italia is controlled by the Telco consortium, comprising Telefonica and three Italian financial institutions, which collectively own 22.4 percent of the group. Telefonica owns around 10 percent of Telecom Italia. Insurer Assicurazioni Generali, and banks Mediobanca and Intesa Sanpaolo are also shareholders.
Vila refused to comment on the details of Sawiris proposal or on whether Telefonica would accept to be diluted if a capital increase were to take place. "We have not received any offer from Mr. Sawiris, and we are not expecting any offer from him. It seems he sent a letter to the company, so it is up to them to speak." Asked whether Telefonica would accept to be diluted, Vila said that "It's not clear that TI would need any capital increase at all."
Telefonica's CFO Angel Vila also said that Telefonica had ruled out a capital increase itself. "We have no need for a capital increase and no intention to do a capital increase," said Vila.
