June 24, 2020 / 7:14 PM / 9 days ago

UPDATE 1-Italy's TIM to cash in 1.6 bln euros from sale of INWIT stakes

* TIM will use proceeds to cut debt

* Deal highlights appetite for telecom network assets (Add quotes, details)

By Elvira Pollina

MILAN, June 24 (Reuters) - Telecom Italia (TIM) said on Wednesday it was set to cash in 1.6 billion euros ($1.8 billion) from the sale of direct and indirect stakes in mobile tower group INWIT as the phone group presses ahead with its planned debt reduction.

The deal highlights appetite for telecom network assets providing steady returns to investors at a time of uncertainty due to the coronavirus emergency.

“We are fully convinced that digital networks, which showed their resiliency during the coronavirus crisis, will increase their importance globally”, Mathias Burghardt, head of Ardian Infrastructure, said in a statement.

Under the agreement, TIM will sell to a consortium led by French investment firm Ardian 49% of a company where it plans to transfer a 30.2% INWIT holding.

TIM said it had also agreed to sell an up to 3% direct INWIT stake to a vehicle managed by Canson Capital Partners.

TIM, which prior to these deals directly held 33.2% of INWIT, will continue to jointly control of Italy’s biggest mast company with rival Vodafone.

The transactions will help TIM to cut its debt, excluding leases, to 19.4 billion euros from 21.7 billion at the end of March.

The former phone monopoly is also in exclusive talks with U.S investment firm KKR for the sale of a 40% stake of its fixed last-mile network.

A source with knowledge of the matter said KKR could make a binding offer for TIM’s network asset next month, in a deal that could lay the groundwork for a merger of TIM’s fiber assets with those of rival Open Fiber. (Reporting by Elvira Pollina, editing by Valentina Za and Angus MacSwan)

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