Saturday 18 November 2017

Former Telstra chief Trujillo lines up €7.5bn bid for Telecom Italia

A trader works on the floor of the New York Stock Exchange. Photo: Getty.
A trader works on the floor of the New York Stock Exchange. Photo: Getty.

Daniele Lepido and  Jeffrey McCracken

Former Telstra chief executive officer Sol Trujillo is seeking to raise as much as €7.5bn to bid for a stake in Telecom Italia, according to people familiar with the matter.

Trujillo has discussed the plan with New York-based financial advisers, and sovereign-wealth funds in Qatar and Abu Dhabi are among investors that have expressed interest, said the sources, who asked not to be identified.

Trujillo hasn't approached Telecom Italia's board or executives because the plan isn't fully funded and he wants to secure support from Italy's government before making a move, they said.

The proposal would foresee Trujillo (62) - who previously led US West Communications, France's Orange SA and Telstra of Australia - taking over as chief executive officer and bringing in managers to Milan-based Telecom Italia, according to confidential documents seen by Bloomberg News detailing the project, dubbed 'Adriano'.

An investment of €7.5bn would be equivalent to almost half of Telecom Italia's market value. Telecom Italia, whose rating was cut to junk last year, had net debt of €27.5bn as of June 30.

While details of the plan are still being worked out, Trujillo's investment could take the form of a proposed capital increase or buying Telecom Italia shares on the market, the people said.

Telecom Italia shares surged as much as 5.2pc to 96 euro cents each, the highest level in three months. They advanced 3.6pc to 94.5 cents as of 1.43pm in Milan.

Sources said Mr Trujillo views the proposed investment as a way to benefit from a Telecom Italia turnaround over time, rather than a short- term financial gain, the people said.

In addition to owning a national phone network, Telecom Italia controls Brazil's second- largest wireless carrier Tim Participacoes.

Shareholders Telefonica, Mediobanca, Intesa Sanpaolo and Assicurazioni Generali are currently winding down the holding company that owns 22.4pc of Telecom Italia. (Bloomberg)

Irish Independent

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