Telecom Italia Has No Plans to Merge With Telefonica
ROZZANO, Italy -(Dow Jones)- Italy's largest telecoms operator Telecom Italia has no plans to merge with Spanish giant Telefonica and isn't worried about its heavy debt burden, the top managers of the Italian operator said Monday.
In a speech opening Monday's annual shareholder meeting, Telecom Italia Chairman Gabriele Galateri said the group isn't planning any capital increase.
Telecom Italia shares have been under pressure recently, sparking talks of a possible takeover by Telefonica, which holds a 10% indirect stake in the Italian operator.
Telecom Italia is controlled by holding company Telco, which has a 24.5% stake. Telefonica, Italian banks Intesa Sanpaolo, Mediobanca, insurer Generali and Benetton holding company Sintonia also have stakes.
The Italian operator has an available liquidity of EUR6.8 billion and hasn't been hit by the banking and monetary crisis of the last months of 2007, its chief executive said Monday in his speech to shareholders.
Telecom Italia CEO Franco Bernabe also said the company has an additional credit line worth EUR8 billion expiring in 2014, of which EUR6.5 billion unused and available.
Bernabe said Italy's largest telecom operator, which had debt of EUR35.7 billion at the end of 2007, can easily face its debt schedule in the next four years.
Telecom Italia's debt has an average interest cost of 5.6%, he said. About 70% of it is at a fixed rate, with an average maturity of about eight years.
Italian fund managers' association Assogestioni is expected to battle Monday against the Fossati family at Telecom Italia's annual meeting for the three board posts reserved to minority shareholders.
The Fossati family, which has a 4.45% stake in Telecom Italia, has said a merger between the Italian operator and Spain's Telefonica would be the "ideal scenario."
At 1045 GMT shares in Telecom Italia were down 2.2% at EUR1.42, underperforming an overall negative market.
-By Giada Zampano, Dow Jones Newswires; 39 348 7678016; giada.zampano@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 14th April 2008
