Sawiris revives Telecom Italia interest, wants Telefónica out

Egyptian billionaire Naguib Sawiris has turned his focus back on the Italian market, as reports say he has revived his interest in Telecom Italia, while also stressing he wants Telefónica out and Tim Brasil to be retained within the Italian group.

According to Bloomberg, Sawiris, who saw his offer to buy Telecom Italia for at least €2 billion ($2.7 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.

"I am still interested in Telecom Italia but only on two conditions: that Telefónica exits and that Telecom Italia does not sell Brazil," he told Bloomberg. "From a financial point of view, Telecom Italia still needs a massive €3 billion to €4 billion capital increase," Sawiris added, although he did not confirm how much he would be willing to invest.

Both Bloomberg and local Brazilian paper Folha de S.Paulo reported that Sawiris also said he would be interested in making an offer for Tim Brasil should it be put up for sale.

"I think it's not good for Telecom Italia to dispose its stake in Tim Brasil," Sawiris told Bloomberg. "It does not make any sense to me, because it will reduce the carrier to a regional company only focused on Italy. In the case they will decide to sell Tim Brasil I am interested in making an offer."

Telefónica intends to increase its indirect holding in Telecom Italia and it has been speculated that the Spanish operator could force a sale of Tim Brasil to strengthen its own Vivo unit in the South American country. The operator is now under pressure from Brazilian regulators to resolve these potential conflicts of interest in the country.

Telefónica recently denied a report that it was planning to set up a joint vehicle to buy and then break up Tim Brasil together with local rivals América Móvil and Oi.

Sawiris is believed to have made contact with Telecom Italia last September, around the time that AT&T and Telefónica were also cited as interested parties. Telefónica eventually reached an agreement with other core Italian shareholders in Telecom Italia to gradually increase ownership of Telco, which owns a 22.4 per cent stake in the Italian incumbent.

Sawiris is also the former owner of Italian operator Wind, now owned by VimpelCom since 2011, and has considerable experience of the Italian telecoms market.

Meanwhile separate reports also suggested that Telefónica is in talks to refinance about €5 billion ($6.8 billion) of debt maturing in 2015, Reuters said, citing unidentified sources. The move is believed be part of efforts to improve the company's financial standing ahead of possible acquisitions, such as in Brazil.

For more:
- see this Bloomberg article
- see this Reuters article
- see this separate Reuters article
- see this Folha de S.Paulo article (translated by Google Translate)

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