Fintech to Appeal Regulator's Rejection of Telecom Argentina Deal, Says Telecom Italia

By Manuela Mesco

MILAN--Investment firm Fintech Advisory will appeal the decision by Argentina's telecommunications regulator to reject its plan to buy Telecom Argentina from Telecom Italia, the Italian operator said Friday.

The sale, worth $960 million, was first announced in 2013.

Fintech wasn't immediately available for comment.

Telecom Italia said under the terms of its agreement with Fintech it could look for another buyer if the sale wasn't finalized by April 2017. In such a case, according to the terms, Telecom Italia would be guaranteed to receive at least $630.6 million in proceeds from any future sale to another buyer.

If Telecom Italia is unable to find another buyer, it would get $175 million from Fintech and the agreement would be terminated, the Italian operator added. It would also have the chance to buy back a 17% stake in the holding company that controls Telecom Argentina, Sofora Telecomunicaciones SA, which it sold to Fintech earlier as part of the deal.

In November 2013, Fintech agreed to pay $859.5 million for Telecom Italia's 68% stake in Sofora. Under the agreement, Fintech said it also would pay $100.5 million for Telecom Italia to provide technical support to Telecom Argentina and other services for up to three years, among other conditions.

The sale was part of Telecom Italia's effort to raise about EUR4 billion ($4.57 billion) by 2016 to bring down its EUR27 billion of debt.

Argentina's regulator said on Thursday it had rejected the deal. It said that Fintech lacked experience in the telecommunications industry and that approving the deal would have left Telecom Argentina "in the hands of a company comprised merely of investors."

Write to Manuela Mesco at manuela.mesco@wsj.com

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(END) Dow Jones Newswires

October 16, 2015 05:00 ET (09:00 GMT)

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