Italy passed two decrees on Monday, which provide for the Ministry of Economy to acquire a stake of up to 20% in the fixed-line telephone network Telecom Italia (TIM).
The deal implements a Memorandum of Understanding signed on August 10 between the Treasury Department and US fund KKR for the joint acquisition of NetCo, an entity that includes both TIM’s domestic fixed access network and Sparkle’s submarine cable division.
” The government has taken measures to protect national interests and workers ,” Prime Minister George Maloney said in a statement.
KKR offered about 23 billion euros for NetCo, taking into account debt and a number of variables, while leaving the option for the government to join its offer and retain oversight of the asset.
Economy Minister Giancarlo Giorgetti told reporters that the rulings would allow the Treasury to buy a minority stake in NetCo worth “up to €2.2 billion” in partnership with KKR and other domestic players.
” The government is interested in confirming state control over certain strategic decisions regarding infrastructure, which we consider strategic ,” he said.
According to the publication, Rome will issue sovereign bonds to finance its investments. However, the acquisition will replace other financial transactions that were already factored into the latest estimates of Italy’s public finances, so the debt-to-GDP ratio will not be affected, Reuters added.