By Elvira Pollina

MILAN (Reuters). Telecom Italia (MI:: (TIM) Luigi Gubitosi, CEO of Italy’s ex-monopoly phone company, will face the board Thursday in a meeting called by Vivendi (OTC): to discuss two profit warnings made at the end of three months.

Gubitosi, who failed to stop a decline in TIM’s domestic revenue, presented to the board last month plans to extract cash from the group’s assets. This includes its valuable fixed-line grid, which supplies services to millions.

According to people familiar with the matter, his plans to attract new investors into debt-laden companies’ assets failed to win Vivendi support at their last month meeting.

French media groups want to be able to influence the future of TIM’s network assets. They are willing to work with the Italian government to do so, according to people.

According to sources, options for revamping the assets will be addressed at the Thursday meeting. Directors Arnaud Del Puyfontaine (Vivendi) and Frank Cadoret (independent board members), requested it.

Vivendi has 24% stake in TIM. It is an investment that could lead to a capital loss of up to 1.8 Billion Euro at present market prices.

The network assets of TIM are considered strategic by the government. Treasury-owned CDP owns a 9.8% interest in the group, which is used to supervise them and counter Vivendi.

According to sources, both Gubitosi and the CDP backed Gubitosi in March. CDP has so far resisted Vivendi attempting to question his position.

Vittorio Collao, an ex-Vodafone (NASDAQ:), boss, is now responsible for Italy’s ultrafast broadband push. He will be a crucial part of settling the fate of the TIM CEO.

Colao has reacted negatively to a proposal by the Treasury of Italy’s former government, which merged TIM’s fixed line access network with Open Fiber’s.

According to sources, Gubitosi tried to restart the plan by persuading Vivendi that TIM should take control of the merged entity. This was an option which the French group has always rejected.