Telecom Italia SpA plans to kick off the sale of a minority stake of its enterprise unit, potentially valued over 6 billion euros ($5.9 billion), in a move aimed at raising cash to start cutting its debt pile, according to people familiar with the matter.
(Bloomberg) — Telecom Italia SpA plans to kick off the sale of a minority stake of its enterprise unit, potentially valued over 6 billion euros ($5.9 billion), in a move aimed at raising cash to start cutting its debt pile, according to people familiar with the matter.
Telecom Italia shares rose as much as 2.7% in Milan trading, giving the company a market value of about 4.5 billion euros.
The board of directors is expected to start the sale of up to 49% of the business on Nov. 9, when Telecom Italia will also approve third-quarter results, said the people, who asked not to be identified because the plan isn’t public. The sale will be conducted via an auction process, the people added.
A spokesman for Telecom Italia declined to comment.
Earlier this year, Telecom Italia rejected a nonbinding offer by CVC Capital Partners for the enterprise unit, which valued the business at about 6 billion euros including debt, people familiar with the matter told Bloomberg in June.
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Telecom Italia Chief Executive Officer Pietro Labriola, who was appointed in January, is focusing on extracting value by separating the company’s infrastructure unit from its commercial business.
The spun-off unit will be part of Telecom Italia’s ServCo division and will include the iconic Olivetti brand, cloud computing activities, Noovle data centers, Telsy cybersecurity business and others assets, according to a statement last March. Services grouped within the enterprise unit generated about 3 billion euros of revenue last year. Telecom Italia sees those units revenue topping 5 billion euros by 2030.
(Updates with shares in second paragraph.)
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