By Elvira Pollina

MILAN, Reuters – Telecom Italia is considering selling its stake INWIT mobile tower group to French investment fund Ardian in order to strengthen its finances. A source close to this matter told Wednesday.

A potential deal would see debt-laden TIM raise 1.3 billion euro ($1.5 billion) through the sale of its 15.4% indirect share in Milan-listed INWIT. This is based on current market values.

Telecom Italia (MI:). Ardian already holds a 15% indirect stake in INWIT. Ardian declined to comment.

According to La Repubblica’s first report, the possibility of INWIT sales is being considered by Pietro Labriola who will present a plan for investors next week. This alternative to KKR’s 10.8 billion-euro takeover offer to TIM.

Thousands of TIM employees, who are worried about their jobs following the turmoil at Italy’s largest Telecoms Group went on strike on Wednesday.

Isabella Marotta (43), a Telecom Italia employee, said that customers care workers are most vulnerable to job cuts. She was speaking out in Milan.

Under Labriola’s draft plans, TIM’s domestic business would be split between a network business and a services arm in a bid to unlock value through M&A deals and assets disposals.

According to another source, this plan would see the service unit absorb 15,000 of the approximately 42,000 Telecom Italia domestic employees, while the rest would be transferred into the network company.

TIM shares fell 3.3% to 0.38 euro on Wednesday. This was below KKR’s 0.505 Euro a share proposal. Telecom Italia’s top shareholder Vivendi (OTC) branded it too low.

RELEASES LOOM

La Repubblica reported Wednesday also that TIM was considering a balance-sheet clean-up because its 2021 results are expected to be much worse than anticipated when published next week.

In December, TIM said it expected a “low-teens decrease” in 2021 organic earnings before interest, tax, depreciation and amortisation after leases (EBITDA-AL) for its domestic business.

TIM issued profit warnings in three different places last year. TIM will book additional one-off and asset impairments for 2021 results. TIM will also eliminate dividends from ordinary shares. Another source confirmed La Repubblica’s report.

Analysts warn that TIM 2021 results could be affected negatively by a change in a tax structure it tapped in 2020. It increases the likelihood of a major one-off loss to the bottom line.

($1 = 0.8832 euros)