Telecom Italia taps Morgan Stanley in tower lot sale - sources

By Rizza Sta. Ana

Nov 28, 2013 08:48 AM EST

People familiar with the process said Telecom Italia SpA is sounding out the potential sale of around 7,000 towers in Brazil, and apparently had tapped Morgan Stanley to assist the company regarding the matter. Telecom Italia has the tower lot via its Tim Participacoes SA business. Moreover, the the Italian telecommunications company is also studying how to sell its around 12,000 wireless tower lot located in Italy, the same sources said. The sources chose to be unidentified as the deliberations regarding the potential exits were private.

Potential bidders that were mentioned for the sale of the Brazilian tower lot included American Tower Corp. According to one of the sources, the tower lot in Brazil could pick up around EUR700 million or USD951 million for Telecom Italia. On the other hand, possible bidders for the Italian wireless tower lot included Spain's Abertis Infraestructuras SA and Mediaset SpA-controlled Ei Towers SpA. Mediaset is founded by former Italian Premier Silvio Berlusconi. In September, Bloomberg reported earlier that the Italian tower lot could fetch around EUR500 million to EUR1 billion.

Telecom Italia Chief Executive Officer Marco Patuano is reportedly pushing to reduce the debt of the Milan-based company. Telecom Italia's debt had been cut to junk by ratings agencies Standard & Poor's and Moody's Investors Service after Patuano took over as the company chief last month. Patuano claimed to Bloomberg News last week that Telecom Italia could obtain its investment-grade rating within the next three years, and will do so by reviving its local business and reduce its USD38 billion net debt, which is more than double the company's market value.

When asked about the report, Telecom Italia and Morgan Stanley refused to comment about the sale of the tower lots. The representatives of Ei Towers, F2i Fund, Abertis and American Tower did not entertain requests from Bloomberg regarding their interest in the tower lots.

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