By Giovanni Legorano
MILAN--Telecom Italia SpA (TI) will use the proceeds of the
initial public offering of its domestic wireless-tower unit Inwit
to partially pay down its debt and to invest in ultra-fast fixed
and mobile broadband infrastructure, the company's chief executive
Marco Patuano said.
The company said the listing of up to 40% of Inwit will value
the tower business at between 2 billion euros and EUR2.34 billion
and will earn Telecom Italia up to EUR935 million.
"The proceeds of the share sale will be an important element for
our expansion of the ultra-fast broadband network," Mr. Patuano
said.
Telecom Italia's move comes after other European
telecommunication and infrastructure companies also took advantage
of higher valuations to sell assets and reduce debts. Spain's
Abertis Infraestructuras SA (ABE.MC) sold a stake in its tower unit
Cellnex Telecom SA (CLNX.MC) earlier this year.
In the first quarter, Telecom Italia invested about EUR1
billion, in-line with a three-year industrial plan released earlier
this year. As part of that three-year plan, Telecom Italia aims to
invest EUR14.5 billion, about three-fourth of which will be in
Italy and the rest in Brazil.
Telecom Italia's net debt was EUR27.53 billion at the end of
March, a 3% increase from the end of last year.
Mr. Patuano said that Inwit is interested in buying other tower
assets if opportunities arise.
He said Inwit's strategic long-term objective "is to be a
protagonist in the consolidation" of the tower sector. This is also
why the company is so little indebted, he said.
He added that Telecom Italia wanted to keep an industrial tie
with Inwit, but that this didn't necessarily mean keeping its
control of it.
According to the data presented to regulators for the approval
of the IPO, Inwit produced EUR314 million in revenue in 2014, 80%
of which derived from its contracts with Telecom Italia. Its
earning before interest, taxes, depreciation and amortization, or
EBITDA, stood at EUR135 million.
Inwit operates 11,500 sites in Italy that host the transmission
equipment for the mobile phone networks of Telecom Italia and other
operators.
Intesa Sanpaolo SpA's Banca IMI (ISP.MI), Deutsche Bank AG (DB)
and Mediobanca SpA (MB.MI) will be joint global coordinators and
bookrunners in the share sale, while UBS AG (UBSN.EB) will be joint
bookrunner.
Christopher Bjork in Madrid contributed to this article
Write to Giovanni Legorano at giovanni.legorano@wsj.com
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