Bernabe set to submit resignation as Telecom Italia CEO

By Marc Castro

Sep 28, 2013 10:23 PM EDT

According to a source with knowledge of the matter, Telecom Italia SpA CEO Franco Bernabe is set to tender his resignation this week. He submits his resignation after he lost support from the telecommunication firm's biggest shareholders.

He said he intends to tell the board in its scheduled Oct.3 meeting of his intention to step down. The source sought anonymity as deliberations were confidential in nature. One of the individuals eyed to replace the embattled Bernabe is Poste Italiane SpA CEO Massimo Sarni, according to other sources.

A spokesman for Telecom Italia declined to make a comment on the matter.

The group of investors who have lost their confidence as to the stewardship of Bernabe owns 22,4% of the company. This comes after years of stock declines and allowing the Milan based company's debt to near junk rating while Bernabe was at the helm. 

For his part, Bernabe is considering the presentation to the board of the Italian telecoms firm a proposal for a capital increase of nearly EUR6 billion or USD8.1 billion. The first tranche would be at least EUR3 billion. This would be done through a rights issue, a move that many analysts see as unneeded byt he firm.

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