One of the major shareholders in Telecom Italia SpA, Mediobanca SpA announced it had cut its shareholdings by more than half in the telecoms firm currently struggling to achieve its debt paring objectives with a danger of being downgraded to junk status.

Mediobanca had a 2.6% indirect shareholdings over the firm through the holdings company Telco SpA. The Italian bank cut its stake to EUR0.53 per share from EUR1.2 per share, absorbing the loss for the year ending June 30 to a total of EUR320 million or USD427 million. The numbers were confirmed in during a bank earnings presentation conducted earlier today.

This was a different writedown compared to previous ones done, as Mediobanca decided unilaterally without consultation or consensus from its fellow shareholders in Telco, namely Telefonica SA, Assicurazioni Generali SpA and Intesa Sanpaolo SpA.

According to Mediobanca CEO Alberto Nagel, through a conference call, the bank does not intend to invest any more in the Italian telecoms firm. He added that Generali should leave Telco, as he had not received any communication from the insurer as Mediobanca is the largest stockholder in the insurer with shareholdings reaching 13%.