Telecom Italia's Chief Executive Officer Franco Bernabe clarified reports on the company's planned capital increase. Bernabe stated that the reported capital increase by Il Messaggero is not in the agenda of tomorrow's board meeting. However, the CEO may make other important proposals with the company's directors during the meeting.

The Milan-based telephone company said in a statement that the discussion of a capital increase is not included in the board meeting scheduled on August 1.

Telecom Italia shares dropped by 6.5% after the Il Messaggero article, which made them trade shares at a lower 4.5% as of 10:42 am in Milan. Telecom Italia currently has a market value of Eur9.4 billion. The company is looking on a possible spinoff of its fixed-line assets to raise proceeds. It has also looked into a possible merger with Hutchison Whampoa Ltd via its local division. It is to note however, that Telecom Italia's merger discussions with Hong Kong-based Hutchison collapsed in the past weeks.