Report: Sawiris ready to invest up to $2B in Telecom Italia

Egyptian billionaire Naguib Sawiris said he is prepared to invest between $1 billion (€1.38 billion) and $2 billion in Telecom Italia if Telefónica withdrew from the company, and said the Italian company needed funds for future investments.

In an interview with Italian newspaper Il Sole 24 Ore, Sawiris again criticised the presence of the Spanish company in Telecom Italia, saying all Telefónica wanted was to sell the Brazilian unit TIM Brasil and keep some of its assets. "Technically it is very stupid," Sawiris said. "It's like buying a hotel because you want its restaurant. But if you take away the restaurant, the property loses value. A large company such as Telecom Italia becomes a local player without the Brazilians."

It was reported in January that Sawiris had revived his interest in Telecom Italia and also wanted Telefónica out and TIM Brasil to be retained within the Italian group. At the time reports said Sawiris, who saw his offer to buy Telecom Italia for at least €2 billion rejected over a year ago, is still prepared to invest in the Italian incumbent, which is in dire need of extra funding to improve its credit rating from "junk" status.

Telefónica, which together with three Italian financial investors controls 22.4 per cent of Telecom Italia through the Telco holding company, has previously revealed an agreement to increase its control over the Italian operator. The Spanish company also operates a unit in Brazil under the Vivo brand that competes with TIM Brasil and has therefore come under fire from the Brazilian antitrust regulator. It has reportedly been given until the middle of 2015 to reduce its presence in Brazil or weaken its control over Telecom Italia.

Sawiris, who admitted he is not known for his patience, said in this case he is prepared to sit it out until Telefónica decides what to do about its conflicting ownership of Vivo and Telecom Italia. He added that Italian banks Intesa Sanpaolo and Mediobanca have pledged to exit Telco. Insurer Generali said in March that it could exit its holding in Telco as early as June.

Telecom Italia is due to hold an important shareholder meeting on Wednesday this week that should see an overhaul of the board. This move is set to placate minority investors who have been unhappy about Telefónica's influence over the company. Shareholders will also vote on a new chairman: prospective candidates are reported to be Giuseppe Recchi, chairman of Italian energy group Eni, and Vito Alfonso Gamberale. Aldo Minucci is currently acting as interim chairman. Marco Patuano is expected to continue in his role as CEO.

For more:
- see this Il Sole 24 Ore article (translated by Google Translate)

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