Italy Backs Telecom Italia CEO Plan Before Crucial Investor Vote

Donato Paolo Mancini and Alessandra Migliaccio
·1 min read

(Bloomberg) -- Italy still supports a plan to sell Telecom Italia’s landline network worth up to €22 billion ($23.9 billion) to KKR, ahead of a closely watched annual meeting to renew the company’s management.

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Finance Minister Giancarlo Giorgetti said Tuesday that the government-backed plan is the “only realistic one”, the first public remarks from a top official on the matter after investors voiced concerns about Telecom Italia’s higher-than-expected debt forecast for this year.

The Rome-based company has been struggling for years to cut debt and adapt to an increasingly competitive market, and its shares slumped last month with markets fearing a higher-than-expected debt forecast for the end of 2024.

The sale of the grid was orchestrated by the government and by Labriola and cleared in January, in a bid to relieve the company from its financial strains.

But the CEO has been openly challenged by some minority holders, including Merlyn Partners and Bluebell Capital Partners.

Last month, the funds proposed an alternative slate of candidates for the phone carrier’s board, but leading proxy advisers recommended Telecom Italia investors vote in favor of renewing the current board at the upcoming meeting on April 23.

Giorgetti said Tuesday the offer is the only option that “will guarantee the survival and functioning of Telecom Italia in the future,” and that the plan “also has a strategic value,” he added.

--With assistance from Daniele Lepido.

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