MILAN -(Dow Jones)- Italian telephone operator Telecom Italia announced late Monday it has presented a plan to Brazil's telecommunications authority outlining a reorganization of its assets in the country.
The plan calls for the transfer of Telecom Italia's stake in Brasil Telecom into a blind trust called Brasilco SRL.
Telecom Italia owns its stake in Brasil Telecom through Solpart, a holding in which the Italian firm has 38%. Solpart, in turn, owns 51% of Brasil Telecom.
Telecom Italia's 38% stake in Solpart will be transferred into the newly created Brasilco trust.
"With this operation...Telecom Italia will cede ownership of the stake in Solpart and the relative governance rights," the company said.
The Italian firm will consequently no longer be able to exercise voting rights over the company, but it will remain the sole beneficiary of income from the stake "including the price of its future sale," Telecom said.
Telecom Italia said the move, once approved by the Brazilian regulator, will resolve the "overlap of mobile and long-distance lines between (the Italian firm's Brazilian mobile unit) Tim Brasil and Brasil Telecom...for the benefit of all parties involved, including Brasil Telecom and its shareholders."
Brazil's telecommunications regulator had set an Oct. 28 deadline for the overlap between mobile phone and fixed-line licenses to be resolved.
Telecom Italia has been locked in long legal battles over its Brazilian investments.
-By Jennifer Clark, Dow Jones Newswires; +39 02 58 21 9904; jennifer.clark@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 10th October 2006
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