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Italy seeks fresh options for TIM as network bid seen fading

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ROME: Italy’s new government will likely need to seek fresh options for ailing former phone monopoly Telecom Italia (TIM), as a planned bid for its landline grid by state lender Cassa Depositi e Prestiti SPA (CDP) appears increasing­ly unlikely.

Championed by the previous government of Mario Draghi, the multi-billion-euro bid is part of a broader project to combine TIM’S network assets with those of smaller rival Open Fiber to create a unified broadband champion under CDP’S control.

Due by today, an offer would also be central to TIM chief executive officer Pietro Labriola’s plan to break up the struggling phone group

€25bil to cut its (Us$26bil or Rm117.1bil) debt.

But Italian Prime Minister Giorgia Meloni favours putting CDP’S bid on hold, a government source told Reuters on Monday.

Three separate sources had previously said CDP was unlikely to meet today’s deadline, with a fourth source saying CDP had not scheduled a board meeting yet to approve an offer.

Meloni’s office and the treasury did not immediatel­y respond to requests for comment.

Marking a break with the past, Meloni last Friday entrusted the government’s broadband strategy to cabinet undersecre­tary Alessio Butti, who has openly criticised CDP’S plans for TIM.

Butti has called instead on treasury-owned CDP to take over cash-bleeding TIM in full to then sell its service operations, including its Brazil-listed unit.

Economy Minister Giancarlo Giorgetti last week said Butti’s plans required extensive discussion­s within the government, which had “several options” to secure control of TIM’S network.

Analysts say coming up with a new plan to combine TIM and Open Fiber would require at least a year, leaving TIM’S fate in doubt at a time when rising rates increase the drain on the group’s cash flow from interest payments.

“The timing to find a path starts to narrow considerin­g that TIM’S available liquidity covers debt maturities until mid-2024 and debt refinancin­g looks tougher than in the past.” Intesa Sanpaolo wrote in a research note. — Reuters

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