Egypt's Naguib Sawiris Again Mulls Investment in Telecom Italia
Published on: 27th Jan 2014
By: Ian Mansfield
Egyptian telecoms billionaire Naguib Sawiris has indicated that he is still interested in taking a stake in ailing Telecom Italia but only if Telefonica sells its indirect controlling stake in the firm.
In late 2012 he offered to buy a USD2.7 billion stake in the firm, but was rebuffed by its management. Since then, the company has a new CEO, is looking to pay down debt and has made tentative moves that could see it finally sort out its imbalanced shareholder structure.
Spain's Telefonica is under pressure from Brazilian regulators to reduce its influence in the local mobile market, where it has its own network, and through Telecom Italia, effective control of another mobile network.
Telefonica is in this situation as it owns a majority stake in Telco, a holding company that effectively controls Telecom Italia -- which gives Telefonica an indirect control over the company.
Telco, controlled by Telefonica can nominate 6 directors to the Telecom Italia board, to sit alongside five independent directors.
However, Telecom Italia's board of directors is now considering a proposal to shake up the structure and make it fit commercial norms, where shares are matches equally to votes.
Sawiris said that Telefonica leaving the company, which it might be encouraged to do following the shake up might leave him an option to invest into the firm as well.
Although he didn't say how much he would be willing to pump into the company, he did not that Telecom Italia still needs a "massive 3 to 4 billion euros capital increase."
Whether his investment offer will be an incentive to Telecom Italia to sort out its shareholding structure may become clearer in next month's board meeting.
This would mark Sawiris's second investment in the Italian market. His Weather Holdings company owned Wind Italia, a rival mobile network prior to its sale to VimpelCom.
On the web: Bloomberg News