By Manuela Mesco
MILAN--Italy's telecommunications company Telecom Italia SpA
(TIT.MI) is still negotiating the sale of its broadcasting unit
Telecom Italia Media SpA (TME.MI) and a final decision should come
at the beginning of February, a person close to the company said
Thursday.
Another person familiar with the negotiations said that Telecom
Italia's top management is inclined not to sell its broadcasting
unit any longer and wants to wait for better times and conditions
to close the deal.
Telecom Italia's board is meeting Thursday to further discuss
the sale of the unit, which is important for Telecom Italia to
reduce financial pressure and ease off the company's debt.
TI Media posted a net loss of 53.8 million euros for the first
nine months of 2012, with a net debt of EUR224.1 million at Sep.
30. Such bad performance can impact its controlling
company--Telecom Italia--which is struggling to meet its 2012 and
2013 end-year net debt targets of respectively EUR27.5 billion and
EUR25 billion. Telecom Italia's net debt stood at EUR29.5 billion
at Sep. 30.
Telecom Italia received two binding offers for its broadcasting
unit last December: one from Cairo Communications SpA (CAI.MI) and
the other one from private equity funds Clessidra and Equinox. But
Telecom Italia responded that it wanted to try and negotiate better
conditions to close the deal.
According to the person close to the company, the final decision
should come before the board meeting to approve its 2012
preliminary financial results.
If this is the case, TI Media could need a recapitalization soon
in order to limit current losses, an analyst said. "If Telecom
Italia goes on with the strategy seen in the last two years, a
recapitalization could be necessary and it might make it harder for
Telecom Italia to exit the TV company in the future," the analyst
explained.
Alberto Chimenti contributed to this story
Write to Manuela Mesco at manuela.mesco@dowjones.com
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